WB denies tampering with RI poverty figures<\/p>\n
NEW YORK (Dow Jones): World Bank officials Tuesday hit back at
\ncharges they manipulated figures on the number of poor in
\nIndonesia to avoid embarrassing the Soeharto regime before its
\nfall last May.<\/p>\n
The charges, previously reported in the Wall Street Journal,
\nhave been voiced among others by Jeffrey Winters, a former
\nconsultant to the U.S. Agency for International Development now
\nat Northwestern University.<\/p>\n
But after keeping relatively quiet on the issue, Bank
\nofficials now lambast the charge as a "ludicrous assertion."<\/p>\n
"There was no deliberate manipulation to please a government,"
\nsaid Peter Stephens, spokesman for the Bank's East Asia and
\nPacific regional office.<\/p>\n
"The methodology used in Indonesia is entirely consistent, and
\nsomething that we stand by across the board. We're not in the
\nbusiness of fiddling numbers. We're in the business of reducing
\npoverty," he told Dow Jones Newswires.<\/p>\n
At the heart of the debate are charges by Winters that during
\nthe preparation of its 1990 "Focus on Poverty," the Bank buckled
\nunder pressure from the Indonesian government to alter its
\nestimate of the number of people living in poverty.<\/p>\n
Then President Soeharto, the self-proclaimed "Father of
\nDevelopment," had personally declared a record low of 30 million
\npeople living in poverty - proportionately less, at the time,
\nthan in the U.S. Critics charge that the Bank agreed to use
\nSoeharto's figure for fear of embarrassing his regime.<\/p>\n
World bank figures are generally considered to be independent
\nand are used by a wide range of third parties, including ratings
\nagencies such as Moody's and Standard & Poor's. But the issue is
\nat the center of wider allegations that the Bank routinely gave a
\nfalse impression of events in Indonesia in order to defend its
\nstatus as the jewel in the World Bank's development crown.<\/p>\n
On Tuesday, Northwestern's Winters stood by his assertions,
\nsaying that while he worked in Indonesia, the fudging of numbers
\nby the World Bank was something that people just "rolled their
\neyes at."<\/p>\n
Winters has long maintained that the World Bank turned a blind
\neye to diversions by Indonesian officials of around 30 percent of
\nloans, charges which the Bank's vice president for Asia and the
\nPacific, Jean Michel Severino, dismissed in July 1997 as
\n"demonstrably untrue."<\/p>\n
One month after Severino's remarks, a report commissioned by
\nthe Bank's resident staff in Jakarta concluded that "at least 20
\npercent to 30 percent of GOI (Government of Indonesia)
\ndevelopment budget funds are diverted through informal payments
\nto GOI staff and politicians." The report was leaked to the Wall
\nStreet Journal a year later, in August 1998.<\/p>\n
The Journal first reported in July 1998 allegations that the
\nWorld Bank had altered its poverty figures.<\/p>\n
Winters said that he expected the controversy over the Bank's
\npoverty figures to follow the same pattern as the dispute over
\nthe diversion of bank funds.<\/p>\n
"I've been through this before, where I or others say
\nsomething, the Bank issues fervent denials, and then it takes
\ntime for the documents to be leaked from inside or other things
\nto happen before we have the documentation we need," Winters
\nsaid.<\/p>\n
In this case, however, Bank officials were standing firmly
\nbehind their work.<\/p>\n
Kyle Peters, who authored the disputed 1990 report, confirmed
\nTuesday that routine discussions were held with the Indonesian
\ngovernment prior to the publication of the report, and that the
\nmethods used to calculate the poverty levels were discussed.<\/p>\n
But he emphasized that the World Bank poverty figure was not
\nchanged as a result of those discussions. The only change between
\nthe draft and final reports, he said, was that the Bank's
\nestimates were placed sequentially after the government's, and
\nnot before.<\/p>\n
"There was a change in the presentation, but there was not -
\nand this is very important - any change in any of the
\ncalculations or any of the numbers," Peters said.<\/p>\n
However, though the World Bank presented its own figure of 38
\nmillion in its internal report on Indonesia that year, it used
\nonly the official government figure in its public World
\nDevelopment Report to show a staggering 34 percent drop in the
\nnumber of people in poverty over the previous three years.<\/p>\n
Once considered the World Bank's biggest success story,
\npoverty in Indonesia was reported to have fallen 46 percent
\nbetween 1980 and 1987 under Bank figures - a larger fall even
\nthan was claimed by the Soeharto government.<\/p>\n
Since Indonesia's economic crash earlier this year, up to half
\nof the nation's 200 million population has been plunged back into
\npoverty. While the crisis has caused genuine suffering, the huge
\nincrease in the number of reported poor reflects in part a return
\nto statistical reality, Winters said.<\/p>\n
"Just before the crash, the World Bank said Indonesia had
\nroughly 11 percent of its people living in poverty. That was less
\nthan in the U.S.," he said. "Something was very wrong."<\/p>\n
Bank officials concede that they may have been swept up in the
\nenthusiasm over Indonesia. But they strenuously deny they ever
\nwent as far as to doctor development figures.<\/p>\n
Soedradjad Djiwandono, the former governor of Indonesia's
\ncentral bank, seemed to agree with that assessment.<\/p>\n
He said the World Bank did often go along with government
\npressure to soften negative statements about the country in
\nreports. But he said he was never aware that any figures had been
\naltered as a result.<\/p>\n
"This toning-down was always on how you put things in words,
\nnot in figures," he said.<\/p>",
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