A debt criminal

By Protus Tanuhandaru

Jakarta, The Point

Having paid off our debt to the International Monetary Fund (IMF), we wonder whether the World Bank will be the next financial institution to whom we have to pay our debt. Although doing so is still long way off, negotiations to reduce the debt before repaying the loan, proposed by the International NGO, Forum for Indonesian Development (INFID), sound reasonable, when we recall that international debt has been proven much more destructive than effective in helping the poor.

Doing more than the IMF, the World Bank engages in massive projects funded by enormous loans, aiming at 'astronomical' growth projected by the Bank's economists.

But however well-planned, these projects could possibly go awry, thereby disappointing the economists who designed them and 'absolutely horrifying' the recipients of the loan -- unable to enjoy the results promised but bearing the responsibility of returning the loan.

The World Bank unwilling to admit that it has erred in such a fiasco, turns to its conventional policy; blaming the recipient of the loan, here, the Government of Indonesia (GoI). Reasoning that the loan is conditional, the World Bank keeps pressing GoI to reform its policies along the lines of what the World Bank wants, or otherwise return the money the institution has already disbursed and possibly be deprived of access to future loans.

Referring to Professor Jeffry Winters, the scholar ardently accusing the World Bank of failing to deliver the growth it promised, most people will think that what the World Bank is doing can be seen as an act of debt crime -- asking the recipients of the loans to return something they are not necessarily supposed to.

Yet the institution has failed to see that helping the poor does not imply making them poorer by asking them to return what they realistically cannot. Nor should the World Bank further burden the poor in ambiguous projects delivering surrealistic results.

So even if the World Bank considers that Indonesia, given its economic growth, now has the capacity to return the loan, the impoverished of Indonesia are still entitled to a debt reduction of the loans the World Bank used to finance undeliverable projects.

These projects, particularly during the former Shoerharto reign, an era associated with corruption and ambiguous World Bank projects, it is assumed, were designed only on consultation with Soeharto.

Reducing such a debt could be the real panacea of growth that the World Bank has ever dreamed of.