Wolfensohn promotes WB's new development policy

BANDUNG (JP): Some 100 demonstrators who delayed World Bank president James D. Wolfensohn for about 20 minutes inside the Akatiga office in Bandung on Friday afternoon believe the multilateral bank is a vestige of the corruption-infested, authoritarian rule of former president Soeharto.

But Wolfensohn, despite his busy itinerary, came to the West Java capital precisely to listen to the aspirations of poor people, to critics, and to convey a message that good governance is now central to the World Bank's new development policy.

The World Bank chief, accompanied by Minister of Settlement and Regional Development Erna Witoelar, held a brainstorming discussion for about two hours with representatives of non- governmental organizations (NGOs) and student activists immediately after arrival on the Parahyangan train.

"I can get reports and read them at my hotel room in Jakarta, but I prefer talking to people, listen to their voices," said Wolfensohn in opening the discussion at the Akatiga NGO office.

He said he had found during his visits to developing countries over the past five years that poor people lacked a voice and had no opportunity to speak up and be heard.

That is why, he added, he has promoted within the World Bank a new development policy called comprehensive development framework (CDF) that covers social, structural, human, institutional, environmental, economic and financial aspects of development.

From now on, according to Wolfensohn, World Bank lending programs should be based not only on consultations with the host government, as in the past, but also on partnership with civil society elements, the private sector and other stakeholders and external development partners.

"We are no longer oriented to project lending but to capacity and institution building. We consider a loan only part of the means in the overall development approach," he said in reply to questions from skeptics at the meeting.

He added that poor people were adversely affected by corruption.

According to Wolfensohn, development in a country is fundamentally flawed and will not last even with the most sound macroeconomic management and good fiscal and monetary policy if that country does not have good governance.

Most activists who got the opportunity to speak during the discussion said they still doubted the World Bank's seriousness in its new development philosophy, pointing out that the agency is part of the global capitalist system.

"How can you promote accountability, when you yourself are not accountable to anybody? How can you listen to our views when you get impatient with a participatory development process?" a student activist retorted.

Wolfensohn admitted that in the past it was extremely difficult for the World Bank to get its message across to the Indonesian government.

"Sounding an alarm when the economy was growing 7 percent a year was a futile move," he said, referring to the situation under the Soeharto administration.

He did not entirely dismiss accusations that the World Bank had been a source of corruption and loyal supporter of the Soeharto regime.

The World Bank, whose Jakarta office was set up in 1968 and is now one of the largest of its country offices overseas with 200 staff members, was completely caught off guard by Indonesia's economic crisis that began in late 1997 with the crash of the rupiah.

Its annual report on Indonesia issued in May 1997, titled Sustaining high growth with equity, gave an optimistic assessment of the country's economic prospects.

Erna, who was herself an NGO activist before her appointment to the Cabinet last October, admitted she was in the past one of the strongest critics of the World Bank.

"I myself took part in the demonstrations in Washington in 1994, which called for the dissolution of the World Bank," Erna recalled.

When the World Bank celebrated its 50th anniversary in 1994, a lively network of critics organized itself around the world with the provocative slogan of "Fifty years is enough".

The World Bank listened politely to the worldwide criticism and promised to consider people's complaints, but appeared to go on with business in the usual manner.

Wolfensohn, who was appointed president of the bank in 1995 and was reappointed last year for a second term until 2005, apparently needs to work harder to promote the new development policy among the World Bank staff members themselves.

Erna added, however, that the World Bank had begun changing its approach to development, emphasizing partnership with all elements of society.

"I notice the World Bank is now listening to people's voices, to NGOs and no longer dictates its policy," Erna said.

Wolfensohn conceded that the World Bank found it much easier to work with the new government (under President Abdurrahman Wahid) since what the government is now striving to achieve is what the World Bank has aspired to do.

He acknowledged that the new approach to development the World Bank is promoting is much slower as the process requires a lot of listening to different views.

"But working out a program through such a comprehensive consultative process would be much more effective for ensuring broad participation," he added.

But the "Go to hell with your aid" and "Damn your project" banners that greeted Wolfensohn when he and Erna exited the Akatiga office and escaped inside a Kijang van to attend another program speak volumes about the amount of convincing he needs to do to get his message across to poor people in developing countries.