World Bank's integrity in combating corruption<\/p>\n
John M. Miller, Team Leader (April 1998 - April 2002)
\nProject Coordination Office,
\nSulawesi II Urban Development Project, Jakarta<\/p>\n
In his desire to tell everyone how diligent the World Bank is
\nin combating corruption in Indonesia, Country Director Mark Baird
\n(The Jakarta Post, Sept. 12) forgot a few facts. As a consultant
\nwho has worked in Indonesia for almost 20 years, including four
\nyears on the Sulawesi Urban Development Project which he cites, I
\nwould like to add the following.<\/p>\n
The World Bank has long been a willing partner in the corrupt
\nsystem which Baird somewhat hypocritically decries. The Bank's
\nmantra has always been \"push money\", and projects have been rated
\non how effectively they do this pushing. Never mind that
\nSulawesi II may have been poorly designed and prepared.<\/p>\n
Add a few other complications like the monetary crisis, newly
\ndecentralized local governments, three reorganizations of the
\nExecuting Agency (EA, which was formerly the Ministry of Public
\nWorks; now the Ministry of Settlements and Regional
\nInfrastructure) and 18 teams of consultants in four provinces and
\n40 cities. There were also numerous staff changes at all levels
\nof government, three loan cancellations requiring re-programming
\nof the remaining loan amount, overall financial chaos with
\ninvestment lists (DIPs) available in October and only two months
\nleft for implementation, etc.<\/p>\n
Clearly, this was a setting in which many mistakes were made,
\nand at one point the Bank threatened to close the loan if
\ndisbursement were not accelerated.<\/p>\n
Not that these problems, common to many projects I'm sure,
\nexcuse the dismayingly high incidence of outright corruption and
\nshoddy work. Baird didn't mention, however, that the Bank has
\nknown this for years. In about 1995 an internal Bank report
\nestimated that about 30 percent of the loan-assisted urban
\ndevelopment budget was siphoned off through various means.<\/p>\n
The Bank assured the EA that its review was not targeting
\nSulawesi II, but selected it as a large project with a full range
\nof situations representative of projects throughout the country.
\nThere would be no actions taken concerning Sulawesi II, as this
\nwas a study only.<\/p>\n
This was Big Lie No. 1, conveyed through Baird's letter of
\nMarch 13, in which he said \"I suggest that the Government of
\nIndonesia consider halting disbursement for expenditures until
\nremedial actions have been agreed.\"<\/p>\n
This vacuous pronouncement completely baffled the EA. Indeed
\nthey considered that they wanted to implement the program as
\nnewly planned, and considerable effort was expended in
\nidentifying and instituting \"remedial measures\". But then the EA
\nwas hit with Big Lie No. 2.<\/p>\n
The Bank didn't care about the remedial measures, and wanted
\nthe entire program halted except for a handful of physical works
\nneeded to complete several unfinished projects. Only about
\n$900,000 of the remaining loan funds would be used, with the rest
\ncanceled.<\/p>\n
The Bank's Fiduciary Review team found indications of an
\nalarming number of unacceptable (or probably unacceptable, as
\ntheir report frequently states) occurrences of malfeasance.
\nTheir draft report, issued on April 22, summarized these
\nfindings, but provided no details as to which particular problems
\nwere found in which particular contracts, so that the EA could
\nnot check them on their own, as they certainly wanted to do.<\/p>\n
With characteristic arrogance and obfuscation, the Bank's
\nofficers declared that these findings were confidential, and the
\nEA would just have to trust that these findings were accurate.
\nThe EA was dumbfounded, believing that they would surely be given
\nthe opportunity to know the full details.<\/p>\n
The FR report also criticized the EA and consultants for not
\nreporting on problems and issues. In fact, the project was
\naudited by the Supreme Audit Agency every year, providing
\ndetailed information on findings similar to the FR's.<\/p>\n
However, the FR ignored these audits, which should have been
\nits beginning point. The Aides Memoire (reports) of the Bank's
\nsupervisory missions (twice a year) were chock full of problems
\nand issues, and detailed Action Plans were made to resolve these.<\/p>\n
In 1998, the Bank conducted a Topical Review which included
\nCentral Sulawesi and also identified contracting problems and
\nirregularities. The FR ignored all of this data as well,
\napparently wanting to be seen as the group \"uncovering\" project
\nmalfeasance.<\/p>\n
The original loan closing was Dec. 31, 2001, but with about $9
\nmillion left and good progress in the previous two years, the
\nBank's Task Manager assisted in preparing an implementation
\nprogram for an extension to Dec. 31.<\/p>\n
In addition to the usual program of physical works, to fulfill
\nproject goals concerning management, cost recovery and
\nenvironmental enhancement, two special teams were formed. One
\nwould provide management and technical assistance to local water
\nfirms (PDAM), based on the Bank's successful PDAM Recovery
\nProgram.<\/p>\n
A second team would address the problem of inadequate
\nmanagement of solid waste disposal sites and sludge treatment
\nfacilities. Both areas were major goals of Sulawesi II UDP.
\nOther activities concerning environmental improvement and
\ncommunity development were also planned.<\/p>\n
My attempts to discuss the importance of the non-physical
\nworks with Baird and Ani Gupta were stonewalled. I only hope that
\nthe Institutional Integrity Department has indeed made its name
\nout of the ashes of Sulawesi II.<\/p>\n
Clearly the Bank felt that it wasn't really so important to
\nimprove the management of PDAMs, solid waste disposal sites and
\nsludge treatment facilities. After years of not having the
\nintegrity to even admit the problem publicly, the Bank now has
\nintegrity! Now if only they could improve their transparency and
\nbe a little less arrogant.<\/p>\n
It looks like the Bank's department of institutional integrity
\ncould use a few checks and balances also, so in their zeal to
\nestablish themselves they don't desiccate another project.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/world-banks-integrity-in-combating-corruption-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}