Corruption in aid procurement

I write in response to Donna Woodward's article in The Jakarta Post of Jan. 16, 2002 titled Bring the war home: Combating corruption. I agree wholeheartedly with what she says, especially that the most serious corruption is at the highest levels of the bureaucracy.

In my article in the Post of Nov. 29, 2001, I pointed out that millions of dollars had been lost to corruption in aid procurement contracts, often because the design of the contract selection panels was not sound. If a panel includes all or a majority of members from one ministry, those people usually act together in collusion, which is totally invisible. The result is that contracts go to those who guarantee pay-offs to the panel members or their "owners".

I suggest that panels should not be "inbred" from the responsible ministry -- they should have a majority of outsiders on them. Panels/procurement processes could be outsourced and closely regulated, including the last-minute substitution of members. Whereas Ms. Woodward's "good management solution" will take time to have an impact on corruption, this change could have immediate effect.

The government is now embarking on another major project similar to the Social Security Network (JPS) project for the poor. Let us hope they can avoid the procurement fiascos of the old JPS program by implementing revised procurement procedures for contract awards (as suggested herein).

This will be vital to the government's credibility, given the obviously noble intentions of the President when she spoke about addressing corruption.

ROBERT J. COCHRANE CPA

Development Assistance Consultant

UniSadhuGuna Group

Jakarta