World Bank loans

World Bank loans

It seems a pity that Donna Woodward in her turn appears to have missed the main point which I at least perceived from Jeffrey Winters' article. This was that if the World Bank officials were aware that any portion of their funds were being used for purposes which would not benefit the people of Indonesia, then it should not be the responsibility of Indonesians to repay the sums misused. It does seem clear that the Bank officials were indeed aware of such misuse, and we are now only arguing about the level -- which probably is indeterminate, but it would appear that there is consensus that it was at least 20 percent.

De Tray's threat that to default on the loan in this way would result in abandonment by the Bank and the international community is contentious to say the least. His wish to focus on the future is understandable. But the people of Indonesia will spend the next several decades with a millstone of debt around their necks.

Experience in other parts of the world has shown that this will seriously hinder development. I do think there is a very strong case for the Bank and the international community to accept a degree of responsibility for this situation and explore the possibility of debt relief for that portion of the loans which manifestly did not benefit the people who must bear the burden of their repayment.

CHRIS W. GREEN

Jakarta