Analysts see wastage of WB loan funds

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)