ADB pledges grant to support RI decentralization program
M. Taufiqurrahman, The Jakarta Post, Jakarta
The Asian Development Bank (ADB) has pledged a US$700,000 grant to strengthen the audit function against rampant corruption in Indonesia, apart from a $1 billion loan for a six-year term to support the country's decentralization programs.
The financial management specialist of the ADB's Indonesian mission, Farzana Ahmed, said on Tuesday that there was a need to support the country's audit function at the regional level to ensure good governance, accountability and transparency.
"The assistance is of great importance, as auditors have poor understanding and application of internationally recognized audit practices and standards," she told a press conference here.
She said there were overlaps and confusion about the roles and responsibility of audit institutions such as the Supreme Audit Agency (BPK), the Development Finance Comptroller (BPKP), Inspectorate Generals and government supervisory bodies at the provincial and regional levels (Bawasda).
Asked if the grant was part of the ADB's effort to stamp out corruption in the country, which had reached a worrying level, principal programs coordination specialist of the ADB's Indonesian mission Shiladitya Chatterjee said, "Yes, we are naturally worried about the overall governance situation in the country, and governance is one of the most important areas of reform ... and that is what we are trying to improve."
Audit was the principal instrument the government had to prevent corruption, Chatterjee said.
The technical assistant program, which will be undertaken by the National Development Planning Board (Bappenas), will wrap up in February 2004.
Chatterjee also explained that the decentralization aid was part of the ADB's full commitment to supporting the decentralization programs started by the government in 2001.
"The aid would be concentrated on supporting the fiscal capacity of the regions that have a high level of poverty and low natural resources, because ever since the decentralization programs began, the central government has been spending less for them," he said.
The ADB was also concerned about the lowering of development subsidies for villages, which it considered to have impacts on the country's poor. A lack of investment in infrastructure at the regional level also hampered regions in thriving.
The loan is allocated toward a variety of ongoing projects in health, education, environment and urban development. It is also aimed to improve the flow of resources to poorer regions.
Chatterjee said that regions targeted for the loan were provinces endowed with limited natural and human resources such as North Sumatra, South Sumatra, Lampung, East Java, Central Kalimantan, Central Sulawesi, Southeast Sulawesi and East Nusa Tenggara.
"But we aren't entirely abandoning resource-rich regions. For rich provinces like Aceh, Riau, West Sumatra and East Kalimantan, we are committed to boosting the involvement of the private sector in the next three years," he said.
He added that the aid was to be channeled through the central government with which the ADB has an established relationship.
Since the outset of the decentralization programs, the ADB has approved $438 million in loans devoted to regional autonomy- related projects.
Every fiscal year, the ADB allocates aid ranging from $600 million to $1.2 billion to Indonesia.
Established in 1966, the ADB is a multilateral development finance institution aimed at reducing poverty in Asia and the Pacific