WB urges RI officials to declare all their assets

JAKARTA (JP): The World Bank is urging the Indonesian government to require all its major officials to declare their assets and prohibit conflicts of interest in decision making as part of a concerted campaign to stamp out corruption.

Following a week-long study in September on the problem of malfeasance in the country, the bank also recommended that the government should protect whistle-blowers on graft practices from legal intimidation.

"The government also needs to guarantee the freedom of information that makes all government actions open to the public unless there is a reason for secrecy," added the bank, Indonesia's largest multilateral creditor.

The recommendations are stipulated in an aide-memoire made by World Bank Director for Social Policy in the East Asia and the Pacific Region Katherine Marshall, who headed the fact-finding mission from Sept. 13 to Sept. 20. A report summary was released on Thursday.

Under fire over the last few months for allegedly turning a blind eye to corruption in its Indonesian projects, the World Bank assigned the team to assess the problem of corruption and to assist in working out an effective anticorruption strategy.

"Without fundamental soundness and freedom of corruption of government programs, the continued support of the World Bank and international community cannot be guaranteed."

The team found a broad consensus in the government and society that corruption, both public and private, is systemic, widespread and deeply embedded.

"Among the most immediate issues is a well-developed system of shared payments for public services, institutionalized in a system in which official salaries are generally too low to live on," Marshall noted in the summary of her report to the Indonesian government.

She emphasized that her team had no capacity nor mandate to evaluate allegations on corruption, or to assess quantitatively the scale of corruption or the losses entailed.

The World Bank and the international community have mobilized about US$14 billion in aid to Indonesia over the next two years to help it weather its worst economic crisis in 30 years. In addition, the International Monetary Fund has committed $11.3 billion for the 1997 to 1999 period.

The 10-member team met with officials and the representatives of non-governmental organizations, donor agencies and governments and public communities as well as businesspeople in trying to gain a fuller understanding of the complexities of corruption.

The mission determined that the credibility of the government in the eyes of investors and the public has diminished, with a sense that government actions may differ from stated policy.

"In numerous areas, both the reality and perception is that citizens encounter corrupt practices in their daily transactions with the public services," the report noted.

The World Bank considers an effective anticorruption drive as most crucial now in the face of the economic and social crisis because the problem could become much worse in the period ahead.

The mission paid special attention to safeguarding the social safety net programs for the estimated 80 million people living below the poverty line. The programs are mostly funded by international donors, including the World Bank with a commitment of $3 billion.

It recommended that a special independent anticorruption committee be set up to monitor the implementation of the poverty alleviation programs.

"The negative impact, both on the Indonesian society and donor community, of even the perception of corruption in the massive antipoverty programs would be enormous," the team warned.

Although acknowledging the important measures already taken by the government in recent months to address the corruption problem, the bank noted that the strategic framework remains weak and a solid national consensus both on broad approaches and specific action measures has yet to emerge.

It stressed the urgent need to define and advance a national anticorruption strategy, recommending that a national governance reform task force or commission be set up with broad-based representation of all elements of society.

The team said that in the long term the creation of a more effective and corruption free public sector requires addressing a complex set of interrelated problems.

It cited structural problems of limited transparency in setting budget priorities, weak audit arrangements, poorly structured budget, low-paid civil service, minor capacity for taxation, inadequate management controls, and the weak legal and judicial system. (vin)