SSN tangled up in bureaucracy<\/p>\n
By Nurina Widagdo<\/p>\n
WASHINGTON (JP): Indonesia's social safety net (SSN) program,
\nintroduced under a financial bail-out package of the
\nInternational Monetary Fund (IMF), has not managed any
\nsignificant achievements due to the disorientation of the
\nbureaucracy.<\/p>\n
The bureaucracy has become disorientated since the change in
\nthe country's top leadership in May 1998, which was not followed
\nby a change in the bureaucracy itself. Bureaucrats, as a result,
\nhave no vision of how the economic crisis and reform have changed
\nthe situation, and business, therefore, goes on as usual for many
\nof them and corruption is still widely found.<\/p>\n
According to the Directorate General of State Budget at the
\nMinistry of Finance, the first phase of the government's SSN
\nprogram was supposed to be completed by the end of this fiscal
\nyear, which is due this month. But only 70 percent of the SSN
\nbudget of US$2.1 billion has thus far been disbursed, and out of
\nthis, less than half has reached targeted groups. Given such a
\nsituation, the government is to extend the program until June.<\/p>\n
There are two key issues in the SSN program that deserve
\nattention.<\/p>\n
First, the government has not demonstrated adequate
\nperformance in handling the planning, implementation and
\nmonitoring of the program. Various field data and observations
\ndemonstrate the failure of these SSN activities as well as the
\nmisuse of the funds. There has also been a concern that the
\nprogram covers too broad an area and does not address the real
\nneeds of those requiring the social safety net.<\/p>\n
Second, as a general election is scheduled for June 7, there
\nhas been a strong indication that the SSN activities and funds
\nhave been redirected in such a way as to benefit the Golkar
\nruling party and particular political groups. Many people have
\nsuspected that the slow movement of the SSN funds is part of a
\nstrategy to use them for the party's election campaign in May.<\/p>\n
It is important to note that a major portion of the current
\nstate budget comes from foreign aid in the form of fast-
\ndisbursing adjustment loans from the IMF, the World Bank, the
\nAsian Development Bank and other donors.<\/p>\n
It would, therefore, be fair to say that the SSN program has
\nfailed to meet one of its objectives -- safeguarding the poor
\nfrom the severe impact of the economic crisis.<\/p>\n
In the meantime, donors are planning new adjustment loans
\nwhich are supposed to have been better prepared than the ones
\napproved and disbursed last year. The World Bank, for example, is
\nappraising two new loans worth $1.1 billion, one of which is
\ncalled the Policy Reform Support Loan II and the other the Social
\nSafety Net Adjustment Loan. Both are expected to receive approval
\nfrom the World Bank's board of directors in late April or early
\nMay and to be disbursed about a week after the approval.<\/p>\n
However, the new World Bank loans should raise two questions
\nof concern. The first is whether Indonesia needs more money if a
\nsignificant amount of the current SSN funds has not been used up
\nand whether the government has the capacity to implement new SSN
\nactivities if its current program is not performing.<\/p>\n
While the World Bank is imposing conditions on the government
\nfor the approval of the new loans -- one of these is the
\nimplementation of a tighter monitoring system -- it is unlikely
\nthat the government will disburse the new loans by June in an
\naccountable manner.<\/p>\n
The second is whether the government might misuse the new
\nloans to support the ruling party's 'money politics'. Money
\npolitics is the term used in Indonesia to refer to money
\ndistributed by political parties and groups to buy votes. The
\nmodes of channeling the money vary, such as direct distribution
\nof money, free distribution of staple foods, and provision of
\neasy access to credits for cooperatives and small enterprises.<\/p>\n
To at least reduce the possibility of implementing money
\npolitics, there should not be any new foreign public loans
\ndisbursed before the election. In this way, the donors, including
\nthe World Bank, can contribute to the democratization process in
\nthe country.<\/p>\n
Another concern is the possible impact of the new adjustment
\nloans. There are at least three issues related to public interest
\nthat are not being properly addressed in the raising of
\nadjustment loans.<\/p>\n
First, there is no clear procedure on how the public can have
\naccess to influence the preparation of adjustment loans. The
\npublic access to this process seems to be on an ad hoc basis and
\nit really depends on whether or not the donors would provide the
\naccess to the public. For example, there is no access for the
\npublic to influence the matrix that is developed as a condition
\nfor the loans. There is no clear policy as to whether public
\nconsultation on the proposed loan is mandatory; and if public
\nconsultation is required who actually is the target audience of
\nthe public consultations. Neither is there any clear policy on
\ninformation disclosure regarding adjustment loans. While all
\nmultilateral banks, including the World Bank, apply information
\ndisclosure policies to their project lending, this is not
\napplicable to adjustment lending. There is no mechanism that
\nallows the public to file a concern or complaint to the World
\nBank's board of directors before a new adjustment loan is
\napproved.<\/p>\n
Second, there is no requirement for the donors to conduct
\nsocial and environmental impact assessment for their adjustment
\nloans, while adjustment lending, in many aspects, does have
\nadverse impact on the people.<\/p>\n
Third, the monitoring of adjustment loans relies heavily on
\nthe honesty of the government. An independent monitoring team can
\nbe set up or non-governmental organizations can be involved in
\nthe monitoring, but the coverage of adjustment loans is so huge
\nthat it is basically only the government that can provide the
\ndata on the implementation and the matrix fulfillment. At the
\nsame time, we are all aware that there is a significant question
\non governance issues in Indonesia.<\/p>\n
Adjustment loans, by nature, are not expected to support the
\ndemocratization process in the borrowing countries. There are no
\npolicies and guidelines that provide opportunities for public
\nparticipation. In the Indonesian context, adjustment loans are
\nnot necessarily the one solution to the economic crisis,
\nespecially when the crisis has led to political and security
\ncrises. There will be no solution for the economic crisis if the
\npolitical crisis has not been solved. If governance is a priority
\nfor the World Bank -- referring to the Comprehensive Development
\nFramework that World Bank President Wolfensohn has recently
\ntalked about -- it would be sensible for the bank to consider how
\nlending can contribute to or undermine the process of governance
\nimprovement and human resource development in a broader sense.<\/p>\n
The writer is manager for Asia projects of Bank Information
\nCenter, a Washington-based watchdog group.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ssn-tangled-up-in-bureaucracy-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}