Leaking of World Bank aid

Ginandjar Kartasasmita, the minister of national development planning and chairman of the national development planning board, has stressed that he finds it difficult to believe the opinion of Dr. Jeffrey A. Winters. Winters has said the leakage in aid extended to Indonesia in the last three decades by the World Bank has amounted to 30 percent of the total.

What Winters has said does not stand to reason because, if it were true, projects funded by the World Bank would now be paralyzed.

I know for sure that there is a leakage in loans from the World Bank or other international financial institutions in Indonesia. It is difficult, however, to figure out just how big the leakage is. The figure may be between 10 percent and 30 percent of the value of the projects.

Once I took part in the tender and implementation of a project for the supply of laboratory equipment. The funding for the project was a loan from the Asian Development Bank (ADB), which was extended to one directorate general at one ministry. This equipment was to be sent to a number of regions in Indonesia.

There is a trick to getting projects:

a. there were nine supplying contractors who decided among themselves who would be the winner of the tender. The eight other contractors took part only for formality's sake and each got paid 2 percent of the value of the project.

b. the winning contractor supplied goods which were a very low quality, for example Taiwan-made microscopes. Their price might have been only 50 percent of the standard price for the items which should have been supplied. These goods might be broken after only a year's use.

c. the winning contractor distributed money to the project officer, the project supervisor, the heads of the laboratories to which the goods were sent and the paying treasurer.

The amount of money distributed might reach 30 percent of the total value of the project. In Indonesia you must have guts to get involved in collusion.

So, the winning contractor still enjoyed a profit amounting to about 10 percent of the net value of the project. Unless you know this trick and are ready to play the game, you will not get a contract. Competition is really tough among contractors.

Obviously, the losing parties are the Republic of Indonesia and our children and grandchildren who will have to pay off the debts this country incurs.

I know a directorate general official who happens to be the project officer of some projects funded by international loans. He is very rich and is the owner of four houses in Jakarta. He also owns one bungalow and two more houses outside Jakarta. He has three cars and his children are educated in Australia. He is only a civil servant of IV/A category and officially earns about Rp 500,000 a month.

It is true that World Bank funded projects will not be paralyzed because the administrative reports, made in the knowledge of the bank's representative in Indonesia, are correct and clean. However, the reports are in fact only a cover-up as the quality of the projects is actually very low.

This system applies to most government projects funded by either the state budget or by international loans. Collusion and corruption grow well in Indonesia and will continue.

According to a 1996 annual survey and study conducted by Transparency International in Berlin, Indonesia is the second worst country in the world in terms of corruption. Topping the list in this regard is Pakistan.

In Pakistan it was this very problem that brought down the Bhutto regime. In Indonesia there is no cure for a corrupt situation.

Is Golkar (the Functional Group), the winner of the 1997 general election, daring enough to eradicate corruption? Only bragging about it is of no use.

SUHARSONO HADIKUSUMO

Jakarta