WB finds N. Sumatra administration guilty of graft
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.