P.C. Naommy and M. Taufiqurrahman, Jakarta – Non-governmental organizations grouped in the Coalition Against Debt (KAU) called for the establishment of an independent body to audit World Bank loans to the country to determine whether or not they must be repaid in full.
Coalition coordinator Raja Siregar of the Indonesian Forum for the Environment (Walhi) said about 30 percent of the cumulative US$25 billion in World Bank loans during the 32-year leadership of Soeharto were lost to corruption.
"Yet, we still have to pay back the entire debt burden left by the regime. It isn't fair, [and] the World Bank must also take responsibility for being aware of the practice, but failing to take serious measures [against it]," said Raja in a press conference on Wednesday.
Aside from Walhi, the coalition include the Indonesian Corruption Watch, the Indonesian Farmers Federation and the Students League for Democracy.
The coalition plans to march on Thursday from the Hotel Indonesia traffic circle to the Jakarta Stock Exchange building, where the World Bank's Jakarta representative office is located, in conjunction with the bank's 60th anniversary.
According to Raja, an independent auditing body would help provide evidence of corruption, upon which the country could appeal to the international court system and request that the World Bank write off around 30 percent of its debts.
Indonesia, which has been mired in an economic crisis since 1997, has incurred $45 billion in debt to the World Bank. "We could allocate the rest of the money to other sectors, such as education, health and poverty reduction," Raja said.
A country cannot file litigation against the World Bank, which enjoys legal immunity.
The coalition also said the World Bank had not helped the country rise out of poverty and instead drowned it in debts by funding projects that caused losses to the people.
It alleged that many World Bank-funded projects failed to materialize as planned. The coalition cited the $166 million Kedung Ombo dam project in Central Java, completed in 1989, as an example of the Bank's failure.
The project forced 5,390 families, or 20 villages, off 6,700 hectares of land affected by the dam, to be relocated to government resettlement areas in Sumatra.
The World Bank report on the dam project, made available to Inter Press Service in 1999, said the resettlement plans for the villagers were highly defective, as the living standards of 74 percent of families had declined after their relocation.
World Bank lead economist Bert Hofman dismissed the coalition's demand, saying that under no circumstances did Indonesia deserve such debt relief.
He said the Paris Club scheme granted Indonesia leniency in debt repayments to foreign donors. The Paris Club is an informal international group of creditors tasked with finding solutions to repayment difficulties faced by debtor nations.
Hofman said the country's economic situation had accorded it an amicable repayment term "If the coalition's demand concerns foreign loans that had been corrupted or odious debts, the international community does not recognize such concepts," he told The Jakarta Post.
In regards the corruption that had plundered foreign loans, especially during the New Order regime, Hofman said the country should step up its anticorruption drive and stamp out widespread corruption.