'Donors must share blame for graft

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

International donor agencies should share the blame for supporting corruption practices in Indonesia and failing to apply regulations to scrutinize the disbursement of the loans, analysts have said.

They said that donor agencies, such as the World Bank (WB) and the International Monetary Fund (IMF), were in a position to prevent corruption, but had refused to exercise their authority to a maximum degree.

"They should be held responsible for the endemic corruption and ignoring the fact that they hold the power to stop the practice. These points underscore that they are the accomplices of corruptors," Wardah Hafidz of the Urban Poor Consortium said on Saturday.

She said that for decades these donor agencies were aware that between 20 percent and 30 percent of their loans went into the coffers of corrupt Indonesian officials, but not once did they decide to stop channeling the assistance.

"Actually, they have regulations to ensure the transparent use of the funds, but they have never enforced those rules strictly," Wardah added.

She was commenting on the World Bank's move to urge Jakarta to step up measures against corruptors, while insisting that the government was the only one held responsible for the rampant corruption.

She said that despite repeated complaints and allegations of corruption, none of the donor agencies took any measures against the government but instead continued with the disbursement of the funds.

The Consultative Group on Indonesia (CGI) approved on Wednesday US$2.7 billion in fresh loans. An Indonesian official revealed the next day that almost 20 percent of foreign aid was misused. The report was confirmed by the Supreme Audit Agency (BPK).

During the era of former president Soeharto, noted economist Soemitro Djojohadikusumo said that 30 percent of foreign funds were misused.

Wardah said the move to siphon foreign loans started from the planning of certain projects to be funded by foreign aid.

"Each ministry, in a bid to ensure the funds would find their way into their coffers then bribed the officials who held the funds. Back then they were in the National Development Planning Board (Bappenas)," she said.

"Those practices continue all the way until the designated agency obtains the funds for disbursement to the public," Wardah added.

Another observer from the state Diponegoro University of Semarang, Nugroho, suggested that the government establish a control agency with strong authority to closely observe the use of foreign loans.

He said the supervision should start from the planning and continue until the implementation of certain projects, paid for by the foreign funds.

"We need more repressive measures to deal with the possible misuse of foreign loans starting from the planning of certain projects," Nugroho told Antara.

He said that although donor agencies had their own supervisory office to ensure the proper use of foreign aid, they had proven to be ineffective in stopping leakages.

Nugroho said it would be better to establish a team that was authorized to scrutinize the use of foreign loans in all government institutions.