ODA and Accountability: Case Study Indonesia

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ODA and AccountabilityCase Study Indonesia

• CALD FNS Conference
• April 2006 Siem Riep, Cambodia

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Why Give Loan to Authoritarian and Corrupt
Regime?
Source World Bank.
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Case 1 Education SectorBook Reading Project
Project budget US 355,2 MioProject year 1996
2000FindingsCollusion between Publisher and
MoE ? crony publisher Among publishers ?
arrange bidding Mark-up on book prize Weak
procedures - quality of appraisal -
prerequisite can be changed ? flexibleWB
action black-list publisher
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Case 2 Education SectorSchool Improvement Grant
Project

• Grant from Netherlands govt and manage by WB for
  2001-2003 FY
• Grant for 73 district or municipal - US 30 mio
• For Garut district US 980,000 grant and US
  70,000 from local budget
• The project manage by local education agency and
  monitored by CIMU
• Each school received US 5,500 14,500 depend on
  condition
• Findings
• Down payment or marketing fee 10 20 of
  grant
• Mark-down the building quality
• Netherlands govt response by seizing the SIGP,
  instruct WB to investigate

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Findings SIGP Garut
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Case 3Agriculture Loan
Nusa Tenggara Agriculture Area Development
Project (NTAADP)Total Loan US 22,1 (IBRD
scheme)Project year 1996 - 2002Cover 24
sub-districtSulawesi Agriculture Area
Development Project (SAADP)Total Loan US 26,8
(IBRD scheme)Project year 1996 - 2002Cover 2
districtObjectives poverty reduction, increase
peasant incomeActivities improvement on
agriculture and cattle breeding, village
infrastructureTarget groups marginalized
peopleProject redesign micro credit
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Findings NTAADP SAADP

• Project design was highly centralized, top down
• Unclear strategy ? from agriculture development
  to micro credit scheme
• Overlapping project or Pseudo demand
• Almost no impact for marginalized groups ?
  repayment of credit become success indicator
• Only capable group or person can obtain credit
• The creation of credit union was arranged by
  field officer ? relatives and friends

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Recommendation on Findings
Participatory
Poor design couple with top-down approach
Community centered approach
Designated Target Groups Clear indicator
Returned to recipient, Legal action,
Compensating Victims
Cases sound monitoring
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Fall into Debt Trapnet capital drain out
2005
2006
USD 3111 Mio
USD 5800 Mio
USD 6422 Mio
USD 2689 Mio
USD 9744 Mio
USD 3322 Mio
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Fall into Debt Trapthere is a burden of the
National Debt
2005
2006
Source APBN-P2 2005 APBN 2006
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Road Ahead
Donors Responsibility On Odious Debt Haircut (?)
3. No Foreign Loan cut off unnecessary projects
2. People Centered Approach - Participation
1. Prevent and Combat Corruption More Efficiently
and Effectively
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Thank you for your kind attention