Robert Go, Jakarta – There is no guarantee that fresh aid to Indonesia will not be diverted by corrupt officials, as graft has become a way of life, said one of President Megawati Sukarnoputri's senior aides yesterday.
State Minister Kwik Kian Gie, who is in charge of national economic development and planning, told foreign donors from the Consultative Group on Indonesia (CGI): "I cannot promise you that some of these new debts will not be corrupted again, as they have been in the past."
The outspoken minister, who was Indonesia's economics tzar in former President Abdurrahman Wahid's first Cabinet, added that a significant portion of foreign aid to Indonesia had been abused and diverted by corrupt parties.
He said: "For decades, the government of Suharto had not utilised the loans effectively, the requirements and prudential principles for utilising the loans were not followed, and a large portion of these loans were corrupted. Corruption has become a way of life and has spread deep into the roots of society. It is the primary cause of our maladies and hardships."
According to some estimates, as much as 30 per cent of international money channelled to aid development in the country during the reign of former President Suharto was lost to graft. These staggering losses have given ammunition to those who want debts to Indonesia to be forgiven or reduced. They argue that since much of the money never reached the country's poor, the people should not have to pay back the loans.
Mr Kwik went on to explain to donors, who ultimately promised support for Indonesia to the tune of US$3.14 billion (US$5.65 billion) yesterday, that his agency planned to enact certain safeguards against the corruption of future loans.
Decentralised governments at the provincial and local levels, who would now be handling much of foreign aid money heading into Indonesian regions, would be required to comply with the national standards, the minister explained.
Justice-sector reforms and tougher anti-graft measures figured prominently during donors' discussions with the government during the two-day CGI meeting this week. Six months from now, lenders under the CGI will use Indonesia's success in fighting corruption as one of the yardsticks by which they decide just how much of the money they pledged yesterday will get disbursed.
Mr Surendra Agarwal, a World Bank specialist at the Jakarta office, followed up on Mr Kwik's comments: "Strengthening fiduciary standards is a challenge in any country, and particularly so in Indonesia."