World Bank wants good governance, anticorruption<\/p>\n
JAKARTA (JP): The World Bank has again called on President
\nAbdurrahman Wahid's administration to pursue good governance and
\nanticorruption measures to improve confidence in public
\ninstitutions and development programs.<\/p>\n
The bank's country director for Indonesia Mark Baird said at a
\nseminar on Thursday the new government was committed to fighting
\ncorruption.<\/p>\n
\"But progress has been painfully slow,\" he said.<\/p>\n
He suggested the government, together with the House of
\nRepresentatives (DPR), accelerate judicial reform to restore
\nconfidence in the country's legal system.<\/p>\n
\"It is essential to restore confidence in the courts, so that
\ncontracts can be enforced and those involved in corruption can be
\nheld accountable,\" he said.<\/p>\n
To reduce corruption in the bureaucracy, Baird said, there was
\na need for fundamental reforms in the civil service. But higher
\nsalaries alone, without accountability, would not suffice to root
\nout corruption.<\/p>\n
Decentralization and greater regional autonomy, if implemented
\nproperly, could reduce corruption because they involve broader
\nparticipation in development projects, he said.<\/p>\n
\"Decentralization needs to be managed carefully, and local
\ngovernments need to gear up quickly to handle their new
\nresponsibilities,\" he said. \"Not doing so will increase the risk
\nthat quality of service delivery will actually decline.\"<\/p>\n
In addition, Baird said, government procurement systems and
\nfinancial management needed to be strengthened at all levels of
\ngovernment.<\/p>\n
He said corruption, which had become rampant in the latter
\nyears of the Soeharto regime, was raising some serious questions
\nabout the sustainability of the development process in Indonesia
\nand the role of the World Bank.<\/p>\n
\"Although the World Bank maintains tight controls over the use
\nof its funds, we cannot fully isolate our operations from
\nproblems of systematic corruption.<\/p>\n
\"This is a major concern to our shareholders and civil society
\ngroups in Indonesia,\" Baird said.<\/p>\n
To help reduce the level of corruption in Indonesia, Baird
\nsaid the bank was strengthening control mechanisms in every
\nproject it financed.<\/p>\n
Besides corruption, he said the World Bank was also concerned
\nabout the country's exploding debt, from a precrisis level of 24
\npercent of gross domestic product to more than 92 percent now.<\/p>\n
According to the Bank, total government debt rose from US$51
\nbillion in March 1998 to $147 billion today. Almost all of the
\nrecent increase in debt is due to the domestic cost of
\nrecapitalizing banks. The government's external debt is now $63
\nbillion, of which about $12 billion is owed to the World Bank.<\/p>\n
He said this high level of debt severely limited the capacity
\nof the new government to borrow and spend on development programs
\nand that debt servicing would absorb 45 percent of government's
\nrevenue in the current fiscal year.<\/p>\n
The World Bank, Baird said, supported the government's efforts
\nto seek and obtain debt rescheduling, and it had canceled
\nundisbursed commitments of its loans to Indonesia and renewed
\nIndonesia's access to the bank's International Development
\nAssistance (IDA) soft loans.<\/p>\n
\"We expect lending by the World Bank to decline from the
\nexceptional levels of the past few years,\" Baird said.<\/p>\n
The bank, he added, had pledged to disburse $1.5 billion
\nduring the current fiscal year, but this may well be reduced in
\nline with the lower borrowing requirement approved by the House.<\/p>\n
He said the bank would phase out general budget support loans
\nand would shift back toward financing development programs
\nfocused on poverty reduction.<\/p>\n
He noted that good governance and anticorruption measures,
\nequal opportunity and access for the poor as well as economic
\nrecovery and sustained growth would play an important role in any
\nof the Bank's poverty-reduction strategies in Indonesia. (rid)<\/p>",
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"sponsor": "Okusi Associates",
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