Govt accountability demanded in safety net loan

Govt accountability demanded in safety net loan

The World Bank has canceled the disbursement of the second US$
300 million tranche of a $600 million loan to Indonesia, due to
the government's failure to meet agreed loan conditions.
Sociologist Wardah Hafidz, coordinator of the Urban Poor
Consortium (UPC), says the measure has arrived too late.

Question: UPC and other groups demanded that the World Bank
stop the social safety-net loan shortly after it began in 1998,
but the cancellation occurred only last December. Your comment?

Answer: In 1998, when we first made the demand, (World Bank
officials) said the weaknesses could still be corrected. We made
the same demand after the 1999 elections (following allegations
of vote buying using the social safety-net loan funds -- Ed) and
they said the Bank must support the new legitimate government
(headed by President Abdurrahman Wahid).

The demand for the loan cancellation was made because the loan
funds, instead of reaching their target (the poor), had led to
even more widespread corruption, collusion and nepotism (KKN).

The loans did not alleviate poverty because it was a piecemeal
crash program. Job opportunities were not generated for the
poorest and the fight against health problems did not yield
significant results. Hence, the loans only added to our debt
burden.

Wasn't the social safety-net loan only one of the programs
aimed at protecting the poor from the impact of the 1997 economic
crisis?

It was the only (program) then. That it has been stopped now
is a very late measure ... They (World Bank) had so much evidence
(of misuse). Yet they insisted on continuing the program until it
has accumulated to a Rp 30 trillion waste. This once again
reflects the Bank's lack of response to ... pervasive corruption.

What were the main weaknesses of the social safety-net loan?

The funds did not meet the targets, rampant KKN and
centralistic planning -- poverty in the remote areas of Irian
Jaya was approached in the same way as in the capital city.

Didn't the program accommodate "civil society consultations?"

Suggestions from below meant those from local bureaucrats. As
in the New Order (Soeharto regime), and as with many of our other
problems, this "elitism" prevails. It was mainly suggestions from
the universities, the non-governmental organizations (NGOs) that
have been accommodated.

A basic mechanism of the loan was "independent verification of
results".

There were many NGOs evaluating the social safety-net loan
which had found much weakness in its implementation. But because
they also had vested interests, they argued the weaknesses could
be corrected ... These included many government people who set up
NGOs to access the billions of rupiah provided in the loans.

What about the mechanisms of "information dissemination" and
"complaint resolution"?

In theory the data on the loans were sent to NGOs like UPC;
but even NGOs had problems. Worse, people who were targeted
didn't quite understand the information. The drive to monitor
such a program would be there if you knew what subdistrict had
loans for what.

Complaint resolution largely consisted of a P.O. Box and e-
mail -- mediums of the middle class. There were indeed the
consultants working among the people; some worked hard and others
did nothing. The safety-net loans only enriched consultants.

In one case of corruption of the loans in North Jakarta, the
officials in charge at the National Development Agency just
reported to police and waited. So UPC staged a people's trial.

With the cancellation of the loans how will the poorest cope?

The question is only relevant if the funds had really reached
the poor in the first place. Yet the end of the loans does not
really mean the end of the program: it may continue under another
name. A poverty eradication program is being designed (under a
commission led by agronomist) H.S. Dillon. I told him at a recent
meeting that his concept sounds fine, but how will it tackle the
core problem -- the rampant KKN?

What is UPC focusing on now?

We are preparing a class action on a national level, involving
other groups and also those in other cities, against the
President, the government and the World Bank, holding them
responsible for the gross wastes of taxpayers' money in the
social safety-net program. We have gathered so many cases of
malfeasance. The lawsuit will be filed in several district
courts.

What will the charges be?

Basically, they must be accountable for the leakage of
funds ... and we demand that the government no longer undertake
piecemeal policies to overcome poverty.

Despite efforts to empower the urban poor, bureaucrats and
city councillors are doing business as usual -- as indicated by
recent reports of councillors asking for market kiosks. What does
UPC hope to achieve?

At least there has been stronger awareness of the problems and
that people just can't stay silent. Bureaucrats and councillors
may not change soon, but the criticism has not been entirely
futile. They know the heat is on, being criticized all the time.

And this is happening in other cities too, like in Lampung
(South Sumatra) and Bandung (West Java), where people are
focusing their oversight on their respective city budgets.

UPC will also start working on the city planning issue,
another key issue of city management, working among others with
architects.

What led to UPC's rallies calling for people to boycott paying
taxes last Sunday?

With the introduction of regional autonomy each province is
going all out to earn more income mainly from taxes. We're
telling the city administration not to abuse these taxes.

We know this is difficult. But at least this issue has entered
the public domain, which means a warning to the administration
against abusing the funds.

All this time we've been one step behind the administration
and reacting only when something happens. But focusing on the
budget, for instance, is one way to be more proactive. (anr)