New govt ruling on procurement signed

New govt ruling on procurement signed

The Jakarta Post, Jakarta

President Megawati Soekarnoputri has signed a ruling which
tightens procedures for procurement in the public sector, to help
curb flourishing corruption, according to a government official.

Signed on Monday, the new ruling could in turn help Indonesia
secure more loans from the country's creditors, such as the World
Bank, Mahendra Siregar, an advisor to the office of the
coordinating minister for the economy said on Wednesday as
reported by Dow Jones.

Details of the ruling were not available, except that it would
promote transparency and efficiency in the procurement of goods
and services.

It should underline the government's commitment to fight
rampant corruption in the public sector.

International institutions -- such as the World Bank and the
Asian Development Bank -- have often stated that corruption is
mostly evident during the procurement of goods and services for
state institutions.

The World Bank had even suggested that leakage in the process
could account for up to 50 percent of any project's value.

The bank is currently one of Indonesia's major traditional
lenders, providing $400 million in loans annually to help finance
various development projects across the country. The amount is a
far cry from the some $1.5 billion disbursed annually in the
early 1990s.

Many analysts attribute the decline in the bank's loans to
rising concerns about the misuse of loans by corrupt officials
and business players.

The new ruling would come ahead of the government's plan to
propose a law on public procurement, which is now in the drafting
stage. The law, which will replace Presidential Decree No.
18/2000 on public sector procurement, will ensure severe
punishment for corruption in the procurement process.