Report finds 70% of ADB projects in RI unsustainable
Tony Hotland, Jakarta
At least 70 percent of Asian Development Bank (ADB) projects in Indonesia are not likely to produce lasting economic or social benefits, a report distributed on Tuesday by a group of non- governmental organizations claims.
The Manila-based bank has channeled a total of US$16 billion into Indonesia to finance 260 projects here since 1968.
"The ADB's operations evaluation office found that half of all audited projects rated successful by the bank were of questionable sustainability. There's a considerable likelihood that more than 70 percent of Indonesia's ADB projects will fail to produce lasting economic and social benefits to the country," the report by Stephanie Fried of the Environmental Defense organization in Hawaii says.
According to the United States' Congressional International Financial Institution Advisory Commission, the report said, a lack of project sustainability is synonymous with project failure, and sustainability is a much more important indicator of success or failure than what the ADB calls "general success" or what the World Bank calls "successful outcomes".
The ADB rates the projects it supports under the categories of "generally successful", "partially successful", and "unsuccessful".
The report says that if the ADB projects that are rated generally successful were really successful and if this was extrapolated to the $16 billion debt owed by Indonesia to the bank, "this would mean that close to $5.9 billion of Indonesia's debt load was generated from largely unsuccessful, wasteful or harmful projects."
Furthermore, projects in Indonesia appraised as generally successful by the bank involve unmonitored resettlement components, projects where record-keeping seems to have been abandoned, projects that are patently unsustainable, and projects that are so poorly structured that rapid deterioration of project infrastructure is inevitable, the report said.
The report was distributed here by a number of local non- governmental organizations, including Infid and DebtWatch Indonesia, in response to the ADB's 37th annual meeting in Jeju, South Korea, which ended on Monday.
Selected projects funded by ADB
1. Nusa Tenggara agricultural development: This US$137 million irrigation project was started in 1992 and completed in 1996. The project, aimed at draining a total area of 1,440 hectares in Kambaniru, Sumba Timur, was judged by the ADB as "generally successful". The project led to the relocation of more than 1,000 families and the loss of fertile lands.
2. Food crop sector program: The $250 million project was aimed at boosting the growth of the country's food crop sector. It was rated by the ADB as only being "partially successful" in a 1997 evaluation as some of the funds were used to buy raw materials for the textile industry.
3. Health and education project: A $38.4 million project aimed at improving health services in four provinces, it was judged to be "partially successful" in a 1997 evaluation as it was carried out based on the mistaken assumption that physical changes in health centers -- such as the repainting of walls and procurement of kitchen and laundry equipment -- would improve service quality.
4. Agroindustry project: This $29.5 million project was aimed at developing the agricultural sector. The project was judged by the ADB as being unsuccessful in a 1996 evaluation as 90 percent of borrowers defaulted on their loans, which had been channeled through the now-defunct Bank Bumi Daya.