Emil urges govt to probe WB leakage

JAKARTA (JP): Senior economist Emil Salim urged the government yesterday to take further steps in investigating the alleged leakage of World Bank loans, saying it had been a problem for decades.

Emil said Coordinating Minister for Development Supervision and State Administrative Reforms Hartarto Sastrosoenarto should take a harder look at the ministries using World Bank funds.

"Hartarto should directly investigate, case by case or project by project, because the leakage happens in the projects. The leakage can be traced through data from the inspectorate general and the BPKP (the Development Finance Comptroller)," Emil said after opening a seminar on the role of cooperatives in the reform era.

Emil was commenting on a recent report in the Asian Wall Street Journal that quoted a World Bank internal memorandum stating that officials in Jakarta were believed to have siphoned off more than 20 percent of the bank's money earmarked for the country.

The paper quoted the report as saying that much of the corruption involved state contracts with firms owned or controlled by government officials and their relatives.

The report found the worst siphoning of funds -- 25 percent or more -- in the ministries of home affairs, transmigration and forestry, the Journal said.

Emil, a senior minister under one of former president Soeharto's cabinets and now an outspoken government critic, said it would be difficult to determine the exact percentage of funds siphoned off, but admitted that corruption in World Bank-financed projects had become public knowledge.

Emil said that when he was minister of transportation from 1973 to 1978, he received a report about a leakage of funds under an export credit scheme provided by the U.S Export Import Bank to finance the Palapa satellite project.

"I checked the report directly with the president of the U.S Exim Bank and found nothing to support such an allegation. That's why I suggested the government trace it directly to the actual project and not to the donor," he said.

Minister of Forestry and Plantations Muslimin Nasution urged the World Bank to announce which projects in his ministry had had leakages.

"I think the World Bank should be more specific as to which projects were affected by corruption and to what extent, so that we can take the appropriate steps.

"If the World Bank lets the issue linger based on such a general, open-ended report, our image in the international community will be damaged," Muslimin added.

Muslimin admitted some leakage of World Bank funds but argued the amount could not have been as large as the internal memorandum stated.

"I don't deny the problems (of corruption in the ministry)... but the 20 percent figure is a big question mark. How could they have come up with that figure?"

He said he had sent a report to Hartarto indicating which projects in the ministry had been financed by the World Bank.

The Kerinci Seblat National Park project in Sumatra is the biggest project financed by World Bank funds, he said, adding that the bank had provided $30 million to the endeavor.

Latest reports put World Bank loan disbursements in Indonesia as of July, 1997, at about $11 billion. (gis)