Mon, 07 Feb 2000

Supervision of donors' aid

In noting that various donor countries are to make grants and loans to Indonesia (The Jakarta Post, Feb. 3, 2000: Donors pledge $4.7 billion in loans), I see that the meeting of the donors was chaired by the World Bank. I also see that if the International Monetary Fund (IMF) agrees to the new Letter of Intent submitted by the government, they will begin to release US$5 billion in bail-out money.

Not so long ago, the World Bank and the IMF were adamant that they would not lend any money to Indonesia unless the Bank Bali report was published in full, which has been done, and they could see proof that all of the beneficiaries of the stolen money would be prosecuted, which does not seem to be happening. What has happened in the meantime to persuade the World Bank and these donors that there have been any changes in the normal way of distributing aid money in Indonesia? It is known, even admitted by Indonesian authorities, that money disbursed by the central government either does not reach the intended beneficiaries, or only part of it is properly distributed.

In what ways will the donors and the World Bank ensure that this new money will be distributed properly and not end up in the personal bank accounts of various government officials, governors, regents, etc., as has been admitted was the case in the past? Have the donors been promised absolute control, even down to the actual handing out of the money to the intended beneficiaries? Or will they be able to put their own people in to supervise the completion of projects? Or will they pay out only on inspection of the completion of the different stages of the projects? Will they be able to approve the choice of contractors, and will these contractors be ones who have submitted bids in a completely open and competitive tender?

Without some or all of these safeguards it will be the same old excuse by the central government that they are incapable of controlling what the provinces do, and about 30 percent of the money will disappear. This percentage is based on statistics as confirmed by Susan Rose-Ackerman in her latest book, Corruption and Government. Rose-Ackerman is a professor of law at Yale University and has specialized in the study of corruption for the past 25 years. Her conclusions and recommendations deserve careful study by all those who have the true interests of Indonesia at heart.


Cianjur, West Java