Winters says new government must be a clean break from past<\/p>\n
JAKARTA (JP): The country needs a new, clean government with
\nthe credibility to demand the World Bank take responsibility for
\nmassive leakage and inefficiency in the use of its foreign aid,
\nan American expert on Indonesia said on Monday.<\/p>\n
Jeffrey Winters, an associate professor of political economy
\nat Northwestern University in the U.S., said the founding charter
\nof the World Bank placed a clear burden of responsibility on the
\nbank to ensure its funds were not embezzled or misallocated.<\/p>\n
He said it provided Indonesia with the legal basis to sue the
\nbank in the International Court over misappropriation of its
\nloans to the country.<\/p>\n
\"But the current government cannot do this because it is also
\npart of the corruption,\" he told a seminar on Indonesia's
\noverseas debt problem.<\/p>\n
Many associate President B.J. Habibie and most of his Cabinet
\nmembers with the corrupt government of his mentor, former
\npresident Soeharto. Habibie was handed power in May 1998 when
\nSoeharto quit amid unrelenting student pressure, widespread
\nunrest and the debilitating economic crisis.<\/p>\n
Winters said the World Bank dispensed about US$30 billion in
\nloans to Soeharto's government during its 32 years in power, with
\nabout a third of the total considered misappropriated.<\/p>\n
\"Criminal debt, or corrupted debt, refers to that portion of
\nthe total public debt that was stolen, diverted or pocketed by
\npowerful individuals or groups in government,\" Winters said.<\/p>\n
He added that corrupted debt was included in the national debt
\naccount which must be repaid by Indonesians, including the poor.<\/p>\n
\"If Habibie is reelected, Indonesia will lose up to $10
\nbillion because a corrupt government can't demand the World Bank
\nbe partly responsible for the aid leakage,\" Winters said.<\/p>\n
He said a new government should not hold links to the current
\nstatus quo regime in order to solve both the mounting debt
\nproblem and the crisis.<\/p>\n
The country is scheduled to elect a new president in November.
\nPopular opposition leader Megawati Soekarnoputri and the
\nincumbent President B.J. Habibie are the leading contenders.<\/p>\n
Non-governmental organizations (NGOs) have urged Indonesia's
\nmajor donors grouped in the Consultative Group on Indonesia (CGI)
\nto halt any new loan disbursement to the country until a new
\ngovernment has been formed.<\/p>\n
The NGOs made the demand due to the massive misappropriation
\nof foreign loans in the country.<\/p>\n
Despite increasing domestic pressure, both the World Bank and
\nthe government are proceeding with the scheduled two-day CGI
\nmeeting which starts on Monday in Paris. It will decide on new
\nloans of between $5.5 billion to $6 billion to help finance the
\ndeficit of the 1999\/2000 state budget ending in March 2000.<\/p>\n
The World Bank is the coordinator of the CGI.<\/p>\n
Several local economists have warned the danger of the country
\nfalling into a debt crisis similar to that experienced by Latin
\nAmerican nations in the 1980s unless the government comes up with
\na debt management strategy.<\/p>\n
\"This will be the biggest challenge of the upcoming new
\ngovernment,\" said economist Sri Mulyani.<\/p>\n
She said the country's total foreign debt jumped to $152
\nbillion as of March 1999 from about $110 billion before the
\neconomic crisis started in 1997.<\/p>\n
The country's debt service ratio to export earnings is now
\nnearing 60 percent, or twice as high as the precrisis level.<\/p>\n
Sri Mulyani criticized the steep mark-up in costs of
\ngovernment projects funded by overseas loans, and the large
\nnumber of loans used mainly in financing megaprojects which
\ngenerated mostly rupiah revenues.<\/p>\n
Meanwhile, economist Rizal Ramli said the government should
\nconsider asking for another debt rescheduling facility from its
\ndonors. He said it was justified because the country was facing
\nanother serious economic crisis and it always was a \"good boy\" in
\nthe past in diligently repaying its debts. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/winters-says-new-government-must-be-a-clean-break-from-past-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}