Analysts see wastage of WB loan funds

JAKARTA (JP): Two analysts shared American economist Jeffrey A. Winters' view yesterday that World Bank loan funds in Indonesia are grossly wasted through collusion and corruption.

Indonesian Business Data Center's Christianto Wibisono said the 30 percent leakage in the use of World Bank loans to Indonesia, as American expert Winters claimed here Monday, was an "average" level.

But businessman Sofyan Wanandi said the reported leakage could not have been that much, saying that wastage might be "only slightly more than 10 percent".

Both analysts were asked to comment on allegations aired Monday by Winters, an associate professor of political economy at Chicago's Northwestern University, that "about a third" of the money lent to Indonesia routinely disappears somewhere inside the government.

Christianto said senior Indonesian economist Sumitro Djojohadikusumo said early this year that 30 percent of the government's annual spending was wasted through inefficiency and corruption.

"Although there have been no accurate reports based on empirical studies, Winters must have come to his conclusion after conducting interviews with informed people, " he told The Jakarta Post.

"It has already become public knowledge here, hasn't it?" he said.

Christianto said corruption could not be eradicated unless the government had the political will to do so.

Separately, Sofyan said that though he believed "much of the loan funds vaporized in usage", he estimated the percentage was "only just above 10 percent".

"It has become even more imperative now for the government and the World Bank to check whether the biddings for World Bank projects here are conducted properly through open, competitive tenders or not," he said.

Sofyan said the government should not ignore the allegations of wastage, but should convince the general public that loans from the World Bank were used efficiently and effectively for their intended projects.

"The government should look for evidence. We have the Supreme Audit Agency, haven't we? There are many ways to prove whether there is something wrong with a project. This we must do," he said.

Sofyan alleged that government projects were more vulnerable to abuse and malfeasance than private-sector businesses.

"We must work together to address this problem," Sofyan said. (10/08/aan)