Battling cancer of corruption

Battling cancer of corruption

By Dennis de Tray and Jean-Michel Severino

JAKARTA (JP): The vigorous debate taking place in Indonesia on
the emotionally charged issue of corruption is certain to raise
awkward questions for government, for international agencies, for
foreign and local businesses, for non-governmental organizations
and other sections of society. All have some knowledge of the
extent of corruption and all must share in the search for
solutions.

It is worth noting that interest in this anticorruption
campaign goes well beyond the shores of Indonesia. Other
countries, developed and developing, as well as international
organizations and companies, are watching the unfolding debate
here for lessons and guidance, because corruption is an
international problem which has defied an easy solution.

The central issue is not whether 20 percent of development
funds were or were not misappropriated because figures such as
these are the roughest of rough estimates. What really matters is
that corruption is widespread in Indonesia and it poses a major
obstacle to economic growth and fairness. Wherever it is found it
must be stamped out.

The questions now being raised here may be awkward, but it is
important that they be answered if Indonesia is to emerge from
the present financial and social crisis and build a strong,
sustainable economy for generations to come. Finding those
answers will require us all -- including the World Bank -- to
honestly evaluate history, including our own successes and
failings, so that we can emerge with an acceptable way of
tackling what has been accurately called "the cancer of
corruption".

And it truly is a cancer. Left to its own devices, corruption
spreads throughout a society and an economy, hurting the poor
and, by its very nature, misallocating valuable resources.

The World Bank directives are clear; we do not tolerate
corruption. We have been working for some time now to reduce the
opportunities for corruption in our projects and, more broadly,
in government and the civil service. But it is a huge task that
will need the best efforts of all stakeholders.

In addition to its long-standing efforts to fight corruption,
the bank in the past two years has taken a number of additional
steps designed to reduce the chances for corruption in projects
with which we are associated, and to strengthen government and
civil service capacity to deal with corruption.

Some of the steps we have taken include:

* Increasing the involvement of NGOs, the media and other
elements of civil society in monitoring the implementation and
effectiveness of projects. We have also tightened the supervision
of our projects.

* Addressing "collusion, corruption, and nepotism" (KKN)
through the conditions attached to Indonesia's economic recovery
program. In particular, the World Bank has led the charge within
the donor community in confronting the big monopolies, internal
trade barriers and other significant sources of corruption and
nepotism. Success in this will be critical for Indonesia to
obtain maximum benefit from continuing international assistance.

* Raising "KKN" as a major issue at the Consultative Group
meetings on Indonesia last year and earlier this year. There is
now a consensus between the government and its international
donors on the need for good governance, openness and
transparency. We are engaged in a dialog with the government on a
broad anticorruption initiative, to be backed by a structural
adjustment package later this year.

These are important steps, with significant implications for
all Indonesians. But they are the beginning, not the end, of the
real fight against corruption. Progress will do much to attract
foreign investment, and maximize the impact of foreign
assistance. For this reason, there is a need for a comprehensive
and cooperative anticorruption program in which the government,
civil society and the international community work together to
deal with the culture of corruption.

The bank is considering a number of initiatives such as a
project watchdog committee comprising NGOs and other members of
civil society, and increased use of independent audits and
international public sector reform specialists. We have begun
discussing these steps with the government and civil society, and
will continue to do so.

In the past few weeks, we have witnessed the emergence of
several initiatives in Indonesian civil society to address the
issue of corruption. The World Bank has already started working
with these new groups, and is eager to do more.

The campaign against corruption continues to be a major
priority in our dialog with the government and will have a
significant influence on future lending. Current and future
lending to Indonesia, including adjustment loans, permits the
bank to push the dialog on corruption in a way that was not
possible in the past. This program allows us to offer more
support and protection to the tens of millions of poor
Indonesians who are suffering the effect of an economic collapse.

In the final accounting, only the people of Indonesia can
solve the problems of Indonesia, including corruption. But the
World Bank stands ready to help in any and every way we can. This
is a time of unprecedented opportunity to engage in open and
spirited debate. This is a debate that may cause short-term pain
and embarrassment to many people and organizations, inside and
outside the country. But it will also bring great long-term
benefits to Indonesia and, for that reason, it is a debate that
the World Bank welcomes and actively supports.

Dennis de Tray is the World Bank's country director in
Indonesia, Jean-Michel Severino is its vice president for East-
Asia and the Pacific region.