WB loan delay hints at rising distrust of government<\/p>\n
JAKARTA (JP): The World Bank's delaying of US$1.1 billion in
\nloan disbursement for Indonesia indicates increasing
\ninternational concern over aid abuse by government officials,
\nanalysts have said.<\/p>\n
A senior economist at the LPEM economic and social research
\ncenter of the University of Indonesia, Rasaka Mahi, said on
\nSaturday that the World Bank was particularly concerned over
\nwidespread criticisms of mishandling of the multibillion dollar
\nsocial safety net program.<\/p>\n
\"Many non-governmental organizations have called on the World
\nBank to delay the release of the loans amid fears of abuse by
\ngovernment officials,\" he told The Jakarta Post.<\/p>\n
He explained that the international-sponsored social safety
\nnet aid, aimed at helping the poor survive the current economic
\nstorm, had not all reached the intended recipients and some funds
\nhad been misappropriated by officials.<\/p>\n
\"In addition, there's the political risk,\" he said, pointing
\nout there was no guarantee that government officials would be
\nimpartial when providing the financial aid to the poor ahead of
\nthe country's landmark June 7 general election.<\/p>\n
Government officials have in the past been stalwart supporters
\nof the ruling Golkar Party.<\/p>\n
The World Bank approved on Thursday two loans worth $1.1
\nbillion for Indonesia, including $600 million to help strengthen
\nthe social safety net program and $500 million to support
\neconomic reforms.<\/p>\n
The money was the second set of World Bank credits for
\nIndonesia in less than a week, after $400 million in loans were
\napproved for poverty alleviation and water resource management.<\/p>\n
The country, however, won't have access to the loans until
\nafter the June general election.<\/p>\n
The World Bank said in a statement that it gave approval on
\nthe loans after Jakarta agreed not to touch the funds until after
\nthe election.<\/p>\n
Tony Prasetiantono, an economist at Gadjah Mada University,
\nsaid the World Bank had to delay the disbursement because it
\nwanted to show the Indonesian people that it was not supporting
\nany political party -- namely Golkar -- in the elections.<\/p>\n
\"I think the WB wants to play it safe,\" he said.<\/p>\n
Golkar, which easily won every general election during the 32-
\nyear rule of authoritarian former president Soeharto, is now
\nfacing serious challenges from opposition parties.<\/p>\n
Tony added that the one-month delay to the Bank's loans would
\nnot have a serious effect on the government's budget in the
\n1999\/2000 fiscal year.<\/p>\n
\"The government can secure other sources of funding,\" he said.<\/p>\n
The press earlier reported that the World Bank made the delay
\nfollowing pressure from the U.S. government.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita denied this on Friday, saying the Bank
\ndelayed the funds because Indonesia could not meet certain loan
\nconditions before the election.<\/p>\n
Ginandjar seemed to play down the delay, saying the country
\ndoes not need the loans at the moment anyway.<\/p>\n
But the University of Indonesia's Rasaka urged the government
\nto be serious in taking the necessary measures to prevent further
\nabuse of the social safety net aid.<\/p>\n
\"I think the public has to have a bigger role in monitoring
\nthe program,\" he said.<\/p>\n
He admitted that launching a social safety net program was no
\neasy job, and that other countries had also experienced serious
\nproblems in similar programs.<\/p>\n
The government plans to allocate Rp 6 trillion for the social
\nsafety net program in the current 1999\/2000 fiscal year.<\/p>\n
Chairman of the National Development Planning Board (Bappenas)
\nBoediono recently admitted abuse of the social safety net funds
\nfor political ends.<\/p>\n
The press has also reported that some Rp 8 trillion of the Rp
\n17.9 trillion social safety net aid for the 1998\/1999 fiscal year
\nfailed to reach its intended targets.<\/p>\n
The government and the World Bank are currently working to
\nimprove the social safety net program, including developing a
\nbetter monitoring system and simpler and transparent procedures.
\n(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/wb-loan-delay-hints-at-rising-distrust-of-government-1447893297",
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