[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
WB EDs:Indonesian NGO letter (fwd)
Enclosed is an Indonesian NGO letter to WB EDs. Over 500 anti-poverty,
church, legal aid, environmental, development groups + individuals (over
400 groups) strongly reject the Bank's attempt to provide over $1B to
Habibie government. List of groups signing letter is appended below in
attached file.
Jakarta, May 17, 1999
Executive Directors
The World Bank
Dear Executive Directors,
We understand that on May 18, the Board of Directors of the World Bank
plans to vote on the disbursement of a $600 million Social Safety Net
Adjustment Loan (SSNAL) and a $400 million Policy Reform Sectoral Loan
for the government of Indonesia. We are informed that there have been
efforts to convince the Board that it should vote to approve these
loans to the Government of Indonesia now, prior to the election. It
has been argued that the GOI had made the right commitments to use the
loans properly, as intended.
We, the signatories of this letter representing over 400 legitimate
civil society organizations, strongly oppose this opinion and repeat
our viewpoint that these funds should not be released before the
Presidential elections. The disbursement of over $1 billion on the eve
of our presidential elections will influence the outcome of this
elections and will be utilized by the ruling Golkar party to ensure
its hold on power. There is no technical reason why these loans
cannot be postponed. The GOI has proven that it has sufficient cash
reserves to arm an extraordinarily violent militia movement in East
Timor, to send troops to seal off the border of West Papua, and to
send troops to fire on unarmed demonstrators in Aceh. It is also
necessary to note that the GOI has still not used the entire loan from
IMF and the Miyazawa Plan. Instead of increasing Indonesia?s
staggering debt load, which will have to be repaid by our children and
grandchildren, the Bank should pressure the GOI to redirect towards
poverty alleviation the tremendous amount of funds it is currently
using for the repression of our civilian population. We, and many
others, have unambiguously requested that the World Bank not interfere
in our national elections by providing funds prior to the Presidential
elections. The Bank has continued to ignore this input from civil
society.
Our stand is based on the following arguments:
The Social Safety Net Program, promoted by the IMF and initiated as a
result of World Bank balance of payments support, has failed to reach
the right targets as a result of poor planning, corruption, poor
design, poor implementation and poor monitoring. The GOI has admitted
publicly that 8.6 trillion rupiah out of the total 17.9 trillion
rupiah for the Social Safety Net Fund have been ?mistargetted? or
misappropriated (Jakarta Post, April 24, 1999; Kompas, April 23 and
May 5, Republika April 23 & 26 1999, Media Indonesia, May 6, 1999 and
Tempo May 17, 1999), including 60% of the education scholarship funds
(Kompas, May 4, 1999) and that the SSN funds have also been used to
influence the outcome of our first ?free? national election ? indeed,
the GOI official responsible for overseeing the SSN stated that such
funds have been described as ?Golkar aid? (Jakarta Post, April 23,
1999).
Seven thousand of the Jakarta urban poor, one of the principal
constituencies of the program, signed a petition rejecting the SSN
program based on their experience that it is full of corruption, does
not benefit the poor and leads to a tremendous debt burden to our
country. This is supported by a demonstration on April 22, 1999, of
over 2,000 of Jakarta?s urban poor calling for the halt of the
program, outside the Bank-GOI SSN ?consultation meeting?. (Suara
Pembaruan, April 22, 1999).
The Bank?s OD 8.60 on Adjustment Lending states, in the first three
points under the heading ?Requirements for Adjustment Lending:
Prerequisites:?
The design of a suitable adjustment program is a collaborative process,
but the initiative and the leadership must come from the government.
Adjustment programs require strong political commitment, and the
government concerned needs to generate broad-based support if the
program is to be sustainable. - The strongest influences on borrower
?ownership? are political stability, support (or at least lack of
opposition) from the principal constituencies affected by adjustment
programs, and the attitudes of government officials and technicians
towards the various reforms. - Adjustment lending is not advisable
when the political commitment to adjustment is weak or highly
uncertain.?
Thus, the disbursement of SSNAL over such a strong opposition from one
of its principal constituencies would appear to be in violation of OD
8.60
The right commitment from GOI to better administer the SSN program is
in fact the agreement from the GOI side to comply with the
conditionalities imposed by the World Bank for the disbursement of the
remaining fund. One of the conditionalities is consultation with civil
society in Indonesia. Indeed there is a process which the GOI called
?consultation? which took place on April 14, 15, 16 and April 22,
1999. The consultations were designed in such a way that they did not
allow for a participative and inclusive process. WALHI, an
organization representing 386 civil society groups throughout 24
provinces in Indonesia, INFID, an umbrella organization representing
100 civil society organizations members inside and outside Indonesia,
JARI - JPS, a network representing 30 civil society organizations in
Indonesia, Urban Poor Consortium, an organization comprising of 25
poor communities in the Greater Jakarta area and YLKI, a respected
consumer organization consisting of 21 consumer groups all over
Indonesia, all expressed the disappointment with the so-called
?consultation? process on April 19, 1999. In the joint statement they
stated that the meetings were unproductive and unable to address the
problems and produce comprehensive solutions. These groups,
representing hundreds of legitimate Indonesian civil society
organizations throughout the archipelago, concluded that the
consultations were merely a cynical attempt on the part of GOI to
appear to meet the conditionalities imposed by the World Bank.
The groups stated that:
<a> The consultations were not conducive to meaningful inputs from the
participants and therefore should not be regarded as legitimizing the
Social Safety Net Program. For example, the agenda for the meetings
was decided unitarily by the Government; there were no terms of
reference to explain the framework, process, and outputs expected from
the consultations;
<b> Such a consultation will not produce a comprehensive solution to
the basic problems of Social Safety Net Program;
<c> A more participatory, inclusive and decentralized consultation
should be carried out ? including meetings in the Outer Islands. (NGO
Joint statement on the Consultation Held by BAPPENAS with Civil
Society Groups on the Social Safety Net Program, April 19, 1999)
Both the Bank and the GOI have repeatedly demonstrated their
unwillingness to incorporate the suggestions of civil society into
their operations or to effectively monitor their operations. They
have ignored the call from 7,000 of Jakarta?s urban poor who signed a
petition rejecting the SSN program because it was, in their direct
experience, plagued by corruption and did not reach the poor. They
have ignored repeated written and oral requests by legitimate
Indonesian umbrella organizations representing hundreds of Indonesian
civil society groups calling for a halt to support and funding for SSN
prior to the elections. These requests have been based on widespread
and credible reports of staggering corruption -- such as the
?misallocation? of almost ? of the SSN funds -- and the misuse of such
funds to influence the outcome of the Indonesian elections.
In a May 10, 1999 letter to INFID, Bank Vice President Jean-Michel
Severino claims that ?nearly all of the consensus recommendations
emerging from the April 14, 15, 16 and 22nd consultation meetings with
NGOs and civil society were reflected in the final agreement between
the World Bank and government on the SSNAL.? He then goes on to make
the contradictory statement that ?most of the NGO and civil society
recommendations were already embedded in the Bank?s loan conditions
even before the consultation meetings between government and civil
society.? In the same letter, Mr.. Severino also states that the GOI
is ?actively ?selling? [the reforms] to the public at large.? We agree
with this assessment that the GOI is, indeed, attempting to ?sell? the
reforms to the Indonesian people. This, like Mr. Severino?s other
statements, reflects our view that the contents of the
conditionalities were determined -- primarily by the Bank and the GOI
-- well in advance of the so-called ?consultation meetings? held in
mid-April with civil society.
A May 7 article in Kompas, one of Indonesia?s most prominent
newspapers, reports that just in the last two weeks, Indonesia?s
National Planning Board (Bappenas) has received additional reports of
the misuse of SSN funds by Golkar in Sumatra, Jakarta, and East Java.
It quotes Herman Haeruman, Bappenas? lead coordinator of SSN, as
stating that ?Bappenas, as a planning agency, cannot take significant
action against such abuse.? Mr. Haeruman continued, ?This does not
represent simply an abuse of funds, but it means that the SSN is used
by the government apparatus as political party funds.? As a result,
citing evidence of additional abuse in Sulawesi, Nusa Tenggara Timur,
and Irian Jaya, the Urban Poor Consortium has called for the
disqualification of Golkar from the upcoming national elections.
Indonesia?s Election Committee is now weighing whether to ban Golkar
from campaigning prior to the elections. (Reuters, May 10, 1999)
We, and many others, have clearly requested that the World Bank not
interfere in our national elections by providing funds prior to the
elections and Presidential selection process. Such funds are and will
continue to be utilized by the ruling Golkar party to ensure its hold
on power. The Bank has continued to ignore this input from civil
society.
Given the information on corruption and abuse of funds that has been
released in the Bank?s internal documents on Indonesia during the past
year, it is clear that the World Bank has a long history of being
easily misled by false promises of the Indonesian bureaucracy, which
to date ? despite the ouster of Suharto -- has survived largely
intact. Now, as in the past, promises of reform by GOI can not be
accepted at face value. Bank Vice President Jean-Michel Severino
states in his May 10 letter to INFID, ?Let me assure you that no money
will be disbursed until all conditions are fully met.? We recall Mr.
Severino?s equally heart-felt assurances just under two years ago that
charges of significant corruption in the Bank?s Indonesia projects
were ?demonstrably untrue.? Two years ago, Mr. Severino stated about
Bank?s Indonesia loans: ?We know exactly where our money is going. If
supervision of our projects produced any evidence of misappropriation
or misallocation of our funds, we would take swift action to stop it.
We do not tolerate corruption in our programs. On this principle there
is no compromise." Mr. Severino was wrong then. To ensure that he is
not wrong now, the loan conditionalities should be ? as is the norm --
met during the Loan Appraisal stage, well ahead of any Board vote. A
Board vote on such loans should only occur if the conditions are truly
representative of civil society input and have been met by GOI at time
of Appraisal.
For these reasons, we call on the Board to:
1. Insist that the conditionalities of the SSNAL and PRSL II loans are
based on proven broad civil society input, and are fulfilled prior to any
Board vote on the loans. If, as the Bank believes, the GOI is firmly
committed to reform, it should not be problematic for GOI to establish
compliance with loan conditions prior to a Board vote.
2. Vote against the disbursement of the US$ 600 million SSNAL or the US$
400 million PRSL II prior to the Indonesian Presidential election.
Regardless of Bank claims that
?the timing of the loan is [not] driven by any considerations?about the
election? (Letter to INFID, May 10, 1999), it is a fact that such
funds already have been used to influence the elections and will
continue to be used towards that end. It is common sense that loans
provided at the time of an election to a government that has
repeatedly proven itself incapable of preventing corruption will be
utilized during the election process for political means, thereby
influencing the outcome of the elections. This includes potentially
being utilized to support anti-independence militias in East Timor.
3. Strongly pressure the Resident Mission in Indonesia to investigate the
abuses of the SSN fund and PRSL I and to make their investigations public.
Inquire whether the resident mission , either last year or this year, has
analysed the extent of corruption in various SSN/JPS programs. Inquire
whether they have analysed the impact on corruption of Bank
conditionalities planned for the SSNAL. If they have assessed the ability
of their conditionalities to prevent corruption or the extent of corruption
in the SSN program, what were their findings ?
After abuses have been publicly made known by the Bank, and
recommendations made for the correction of such abuses, the Bank must
investigate whether or not the recommendations have been carried out,
whether the identified abuses have been corrected, whether those
involved have been punished according to the law, and whether there
are new abuses. This information must be made public.
We, the representatives of hundreds of legitimate Indonesian civil
society organizations, call upon you, the representatives of countries
voting to make loans to our government, to take the courageous steps
necessary to reign in our country?s rapidly mounting and unaccounted-for
debt and the abuse of funds that our people must pay back. Thank you for
your attention and consideration.
>
LISTSSN.DOC
WBINFIDM.RTF