World Bank and Indonesian govt to fight corruption

World Bank and Indonesian govt to fight corruption

HONG KONG (AFP): The World Bank is working with the Indonesian government to forge a strategy to fight corruption in the country, a Bank official said yesterday.

Jean-Michel Severino, World Bank vice president for East Asia and the Pacific, said feedback from businesses showed corruption was becoming an intolerable problem in the country of 200 million people.

"That is where it seems the problem is perceived as the worst, and we have engaged the government into a dialogue on this issue," Severino told the Foreign Correspondents Club here.

Corruption figured prominently in the World Bank's consultations with Jakarta, with donor governments raising the issue and calling for progress, the official said.

Severino said there was a growing perception in Indonesian government that "image or real practices of corruption are becoming an impediment to investment and they would like very much to do something about it.

He said he was "pretty confident that we are going to develop actions with them."

But the official cautioned that it could take time to identify "what exactly has to be done because it is much easier to talk about corruption than do something about it."

The Development Committee of the International Monetary Fund and the World Bank, whose purpose is to discuss transferring wealth from the rich to the poorest countries, on Monday agreed that the fight against corruption was key to reducing poverty.

Severino said one of the difficulties in fighting corruption was that it involved a reliance on "perception" in the absence of "objective information."

"We have to rely much more perceptions and act .. without knowing exactly the reality," he said.

But when it does become clear that corruption was a major impediment to growth in any country, the Bank would take action, he said.

"In the case of East Asia, we have had kind of a general feeling that corruption was widely spread but at the same time (there were) very high growth rates.

"And then it was very difficult to go to the governments and tell them corruption was a major problem for growth. They said 'no, what countries in the world are growing faster than we are?'"

It would be "difficult" in the case of East Asian countries to make a direct link between growth and corruption," he said.

But when the private sector sends the message in a "consistent way, then we can really build on that" and take it up with a government, Severino said.

Some countries have expressed fears that including the fight against corruption on the global agenda would be used as an excuse for interference in their domestic affairs, but Severino said many governments felt otherwise.

"They know that corruption is harming the poor in their country and that it is a problem in their own development. Many governments would like to make progress in tackling corruption," he said.

Severino ruled out a connection between corruption and democracy or lack of it, noting that bribery had been widely spread "in very open governments." He gave no examples.

Corruption was becoming "morally and economically unacceptable," adding that the World Bank would join forces with other international organizations to fight the problem.

Contractors who bid for World Bank projects would have to pledge to shun corruption and whose violate the pledge would be blacklisted while the bank tries to stamp out corruption within its own organization.