Professional Documents
Culture Documents
No : D1035 )
Jl. Jati Padang Raya Kav.3 No.105, Pasar Minggu, Jakarta Selatan 12540 - Indonesia
Phone (62-21) 781 9734, 781 9735 * Fax (62-21) 7884 4730 * E-mail: infid@infid.org * www.infid.org
INFID’S STATEMENT
THE IRONY OF INDONESIA’S 65 YEARS OF INDEPENDENCE,
SOVEREIGNTY THREATENED BY DONOR INTERVENTION
A few days left before Indonesia commemorates its 65 years of independence. Amidst a multidimensional
crisis that continues to plight Indonesia, among others mounting foreign debt, unrelenting high rates of
poverty, unbridled corruption and the plundering of natural resources, the country’s spirit of
independence and sovereignty should be able to lift it out of this multifaceted crisis.
It is ironic however, that as Indonesia approaches 65 years of self‐rule, the nation is shorn of its
independence and sovereignty due to the World Bank’s intervention in the administration of the country.
This week, the World Bank has warned several districts and municipalities in West Nusa Tenggara
Province on having failed to establish the Extension Implementing Agency (Bappeluh). (“The World
Bank Tells Off Districts for Not Establishing Bappeluh”, ANTARA, 11 August 2010).
The establishment of Bappeluh is one of the requirements imposed by the World Bank on districts and
municipalities implementing the Farmer Empowerment through Agricultural Technology and
Information (FEATI) program. Another requirement which the Indonesian government must meet is to
prepare counterpart funds worth USD 30.8 million through the national and local budgets. FEATI is the
World Bank’s loan to the Indonesian government amounting USD 92.8 million entered into through an
agreement signed on 28 March 2007.
With regard to this, INFID asserts that the World Bank’s reprimand of districts and municipalities which
have failed to set up the Bappeluh proves to demonstrate World Bank’s arrogance as a donor agency in
implementing its programs in Indonesia. The Paris Declaration on Development Effectiveness plainly
states that donors commit to respect country leadership and help strengthen their capacity to exercise
it/ownership.
In the Jakarta Commitment signed by the World Bank, it is also stated that “development partners will
align themselves more fully with Government programs and systems. Development partners will align
their programming cycles with those of government, use the government format for reporting their
assistance, and increasingly use the government’s financial management and procurement system. When
they do not make use of systems, development partners will transparently state their rationale for not
using government systems and indicate how they will work with the Government (including through
capacity development) to align in the future. In the spirit of partnership, we will also encourage
development partners to fully, sincerely and transparently untie their aid.
In view of this, the World Bank’s move is clearly in contradiction with the Paris Declaration and the
Jakarta Commitment, and is a form of donor intervention on Indonesia’s development sovereignty.
The World Bank’s intervention on the development sovereignty of Indonesia is not merely confined to
program implementation but also on the development goal itself. As the second largest creditor among
multilateral financial institutions after ADB in Indonesia, the World Bank provides loans for several
sectors including agriculture.
An INFID study on several projects and programs financed through World Bank loans has revealed that
these agendas have failed to bring about any positive development impact but instead have become an
increasingly burdensome debt. INFID’s research on PNPM (National Program on Community
Empowerment) has shown that the program focuses more on physical development while disregarding
the social capital put together by the community. PNPM has instead shattered the collective values
emerging from and shared among members of society. This also holds true for the Jakarta Emergency
Dredging Initiative (JEDI) financed by loans for the dredging of 13 rivers in Jakarta. INFID’s research yet
again found that JEDI is ineffective in solving the flooding problems and has imposed a heavier foreign
debt burden on the government of Indonesia as the effect of river dredging will only lasts for a maximum
of five years whereas the government must repay the loans for a span of ten years.
Bearing this in mind, INFID urges the government of Indonesia to desist from bowing to the one‐sided
wishes of the World Bank and other donors which clearly pose a threat to Indonesia’s political and
economic sovereignty. INFID also insists that the World Bank ceases all forms of policy interventions that
interfere with Indonesia’s political and economic sovereignty.
Jakarta, 12 August 2010
Sincerely,
Don K Marut
Executive Director
For more information please contact:
Wahyu Susilo ‐ INFID Program Manager
(0815 1039 2859)