NGO alliance demands audit of World Bank loans to Indonesia

NGO alliance demands audit of World Bank loans to Indonesia

P.C. Naommy and M. Taufiqurrahman, Jakarta

Non-governmental organizations grouped in the Coalition Against
Debt (KAU) called for the establishment of an independent body to
audit World Bank loans to the country to determine whether or not
they must be repaid in full.

Coalition coordinator Raja Siregar of the Indonesian Forum for
the Environment (Walhi) said about 30 percent of the cumulative
US$25 billion in World Bank loans during the 32-year leadership
of Soeharto were lost to corruption.

"Yet, we still have to pay back the entire debt burden left by
the regime. It isn't fair, (and) the World Bank must also take
responsibility for being aware of the practice, but failing to
take serious measures (against it)," said Raja in a press
conference on Wednesday.

Aside from Walhi, the coalition include the Indonesian
Corruption Watch, the Indonesian Farmers Federation and
the Students League for Democracy.

The coalition plans to march on Thursday from the Hotel
Indonesia traffic circle to the Jakarta Stock Exchange building,
where the World Bank's Jakarta representative office is located,
in conjunction with the bank's 60th anniversary.

According to Raja, an independent auditing body would help
provide evidence of corruption, upon which the country could
appeal to the international court system and request that the
World Bank write off around 30 percent of its debts.

Indonesia, which has been mired in an economic crisis since
1997, has incurred $45 billion in debt to the World Bank.

"We could allocate the rest of the money to other sectors,
such as education, health and poverty reduction," Raja said.

A country cannot file litigation against the World Bank, which
enjoys legal immunity.

The coalition also said the World Bank had not helped the
country rise out of poverty and instead drowned it in debts by
funding projects that caused losses to the people.

It alleged that many World Bank-funded projects failed to
materialize as planned.

The coalition cited the $166 million Kedung Ombo dam project
in Central Java, completed in 1989, as an example of the Bank's
failure.

The project forced 5,390 families, or 20 villages, off 6,700
hectares of land affected by the dam, to be relocated to
government resettlement areas in Sumatra.

The World Bank report on the dam project, made available to
Inter Press Service in 1999, said the resettlement plans for the
villagers were highly defective, as the living standards of 74
percent of families had declined after their relocation.

World Bank lead economist Bert Hofman dismissed the
coalition's demand, saying that under no circumstances did
Indonesia deserve such debt relief.

He said the Paris Club scheme granted Indonesia leniency in
debt repayments to foreign donors.

The Paris Club is an informal international group of creditors
tasked with finding solutions to repayment difficulties faced by
debtor nations.

Hofman said the country's economic situation had accorded it
an amicable repayment term

"If the coalition's demand concerns foreign loans that had
been corrupted or odious debts, the international community does
not recognize such concepts," he told The Jakarta Post.

In regards the corruption that had plundered foreign loans,
especially during the New Order regime, Hofman said the country
should step up its anticorruption drive and stamp out widespread
corruption.