WB finds N. Sumatra administration guilty of graft
Apriadi Gunawan, The Jakarta Post, Medan
The World Bank found that most of the Rp 7 billion revolving development assistance fund to North Sumatra had been misused by 17 subdistricts in the province, a World Bank official said here on Thursday.
The Bank's management consultant in the province, Martius, told The Jakarta Post that the misuse of the funds occurred in 17 subdistricts of four regencies -- Mandailing Natal, South Tapanuli, North Tapanuli and Toba Samosir.
He said that the fund misuse had been going on since at least November 2001.
The assistance fund is meant to kick start businesses or regional investments which in turn should make a profit and the money is then revolved back into the fund for other regencies to use as start-up capital or bailout capital for ailing businesses.
He did not say what projects had been funded by the bank in the subdistricts. But he said that all the aid money, which is rotated among the province's subdistricts for improving their economy, should have been returned by the 17 subdistricts by March 2002. However, at present, only about 10 percent had been returned.
During the 1998-1999 period, the World Bank provided some Rp 2.71 billion for each subdistrict, but only Rp 330 million had since been returned.
In the 1999-2000 period, it doled out some Rp 4.4 billion, but only Rp 478 million had been returned.
According to Martius, all the money should have been returned last month to the provincial administration's coordinator for subdistrict development. "Because of the uncollected fund, other subdistricts that have not yet benefited from the project could possibly have to wait for a long time to receive any funding," he said.
North Sumatra Governor T. Rizal Nurdin said that he was very concerned over the fund misuse, and added that it could cause the World Bank to halt all assistance to the province.
He said that his administration would take action against the subdistricts that had misused the fund. "Their actions have not only violated the law but also have tarnished the image of this province. This may cause them (the World Bank) to stop assistance to this province in the future," he was quoted by provincial spokesman, M.L. Tobing recently.
According to Martius, the problem was a result of the fact that most of the regencies did not pay serious attention to the projects.
"The regents should actually coordinate the use of the fund and intervene whenever there is problem facing the projects," he said, without elaborating as to which projects in the subdistricts were responsible for the failure.
He pointed out that if the subdistricts did not return the assistance fund soon, then the World Bank would possibly blacklist the non-obedient subdistricts, or even the North Sumatra province entirely in the next phase of its program.