WB project monitoring needs review

By Nila Ardhianie

SURAKARTA, Central Java (JP): External aid from both international financial institutions and donor countries is playing a very important role in Indonesia's economy, particularly during this time of crisis, but the system of its supervision needs reviewing to avoid past mistakes which led to quite a high level of leakage.

The financial leakage in the World Bank-funded Integrated Swamp Development Project (ISDP) can be used as an example on the need to introduce adjustments in the monitoring of projects financed with foreign aid. Between July 1997 and September 1998, the ISDP was monitored by the farmers participating in the project as the target group.

Such participative monitoring, facilitated by the Duta Awam Foundation, detected various problems, like corruption at various levels, low accountability, lack of transparency, low participation of the community and women, poor social preparation and an inferior quality of physical and nonphysical construction.

However, the World Bank itself seemed reluctant to solve the irregularities related to the project, apparently due to its executives' fear of the then president, Soeharto.

The World Bank's representative, Dennis de Tray, said in his article published in The Jakarta Post of Sept. 24, 1998, that there was no evidence which could be used to file a lawsuit on corruption in Indonesia. Surely he would find difficulties to find evidence if the evidence should be in the form of bank accounts and transaction bills.

Actually, the World Bank could easily find the irregularities if it asked the community directly entitled to enjoy the benefits of the project on the amount of money or volume of the materials that they had received from the project.

If there were irregularities at the community level, it could be expected to find corrupt practices at higher levels, too.

In connection with the implementation of development programs in Indonesia, the World Bank should begin applying a simpler and wiser model of monitoring or supervising in cooperation with the Indonesian government.

With participative monitoring, the donors and the government will be able to detect irregularities directly at the lowest level of the community targeted by the project and empower them.

Farmers taking part in various discussions on participatory rural appraisal with the Duta Awam Foundation disclosed that corrupt practices by some officials involved not only money but goods, too.

Coconut growers joining in an ISDP in Riau, for example, said that each of them had received only Rp 50,000, instead of Rp 200,000 as promised, in assistance for the construction of fences to protect their coconut trees from boars.

They said that each family received only Rp 96,700 in loans, instead of Rp 100,700 as promised, and that they received only one liter of pesticide per hectare, instead of three liters per hectare as planned.

For the construction of simple huts where farmers could get together, each village received only Rp 175,000, instead of Rp 500,000 as promised. Some villages even did not receive any money in this respect.

Another irregularity discovered during the monitoring period was that there were many farmers who had been asked to sign blank forms or receipts for goods or money that they would receive. Obviously, a much longer list of corrupt practices in the ISDPs alone can be drawn up.

Various forms of corruption can easily occur in Indonesia because the transparency level of development projects is very low. In this respect, only a few parties can gain access to the monitoring of the implementation of projects.

The reason for this is very simple. If a group of people are engaged in corruption, they will surely try to block other parties' access to the project in question.

In ISDPs, the low level of transparency is obvious because coconut growers know nothing about the size of their loans, how they should return the loans and also the regulations related to the loans. They never even kept the certificates of the land that they use as collaterals.

The low level of transparency is actually a by-product of poor social participation. Nearly every project in Indonesia does not involve the local community in problem identification, exploration of potencies, role division and discussions on ideas to develop programs. Even if there were some preparations, they were simply a series of meetings with participants already appointed by the relevant authorities.

Social preparations can be of great use to all parties. The community, for instance, will have knowledge about the objectives of the projects and the type of their contribution to make the projects successful.

The absence of adequate social participation will not only lead to low participation on the part of the community but also to the obstruction of the process of democratization. The sustainability of the projects will also be jeopardized.

Minimum social preparations will be an obstacle to the community wishing to secure its rights and will only make the community perennial objects of development.

The fact that social preparations cannot be made to the optimum in various projects here is attributable to the low quality of the parties executing the projects and also to the small number of government personnel employed on a full-time basis for the projects.

Nearly all bureaucratic officials employed in development projects are those already assigned regular jobs in their respective ministries. Those working full time on such projects are usually foreign consultants who are paid hundreds of times as much as the officials and contractors to whom the implementation of the projects is entrusted. It is easy, therefore, to imagine what will happen to development projects because those working full time in such projects are foreign consultants who generally have little understanding about local conditions and contractors who are usually devoid of the visions and missions related to community development.

In the meantime, on the part of the bureaucrats, their understanding of development projects is mostly limited to making the projects an opportunity for moonlighting. The result, obviously, is poor supervision and support.

It is no surprise, therefore, that some of the World Bank's policies on project implementation have been violated without the knowledge of government officials at the central level. Or, perhaps, these officials simply turn a blind eye to such violations.

In this respect, the incidents discovered at ISDPs may serve as an interesting example. The World Bank's operational policy on pest management stipulates that it will not finance pesticides whose formula belong to classes Ia, Ib and II -- which respectively indicate "extremely hazardous", "highly hazardous" and "moderately hazardous".

However, it has been found at ISDPs that 84.6 percent of the pesticides given on a loan or grant basis to the farmers in Riau belong to class Ia, Ib or II, while in West Kalimantan the figure stands at 43 percent.

Such irregularities will remain a crucial problems in the future unless a comprehensive change is introduced in the policies on the implementation and supervision of foreign-funded development projects. Foreign loans, which have been obtained with great difficulty, will simply go to waste if they benefit only a handful of people through corruption, while the burden must be jointly shouldered by the Indonesian community and the state.

The writer is executive director of the Duta Awam Foundation.