WB project monitoring needs review

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.