Thursday, December 1, 2011

Can Indonesia do without foreign aid?

Can Indonesia do without foreign aid?
Don K. Marut, Jakarta | Thu, 12/01/2011 8:53 AM
A | A | A |

From Nov. 29 to Dec. 1, 2011 donors, recipient countries, business associations and civil society organizations are gathering in Busan, South Korea, for the Fourth High Level Forum on Aid Effectiveness, organized by the OECD-DAC (Organization for Economic Cooperation and Development – Development Assistance Committee) and the Korean government.

It is a forum for donors (governments and international financial institutions), recipient countries, the private sector and civil society organizations (CSOs) to negotiate the better management of aid.

According to OECD-DAC, aid is “…fund-flows to developing countries and multilateral institutions provided by official agencies, including state and local governments, or by their executive agencies, each transaction of which meets the following criteria:

(1) It is administered with the promotion of economic development and welfare of developing countries as its main objectives, and

(2) It is concessional in character and contains a grant element of at least 25 percent (calculated at a rate of discount of 10 percent)”.

Indonesia, as one of the biggest aid-recipient countries, is also taking part in the High Level Forum. The repayment of foreign debts (loan components of aid) has absorbed a high percentage of the state budget annually.

Therefore the relevant question for Indonesia, related to foreign aid, is not whether foreign aid is managed and used effectively, but rather “can Indonesia do without aid?” It seems difficult for Indonesia to do without aid for at least four major reasons.

First, the Law on National Development Planning No. 25/2004 and its operational regulations and policies have put Indonesian development within the framework of integration with foreign aid.

In the Medium Term Development Plan, the government of Indonesia published the Blue Book, a kind of shopping list for foreign donors.

This means that the Medium Term Development Plan is designed to be opened up to foreign aid (loans, grants, technical cooperation or foreign consultancy).

The law assigns high-level government officials to be responsible for its implementation.

In India, foreign aid is the responsibility of officials lower than those in the third echelon, which shows the low-level role of foreign aid in India’s national development.

Second, foreign aid is a way and tool for the developed countries and international financial institutions to control the recipient countries. The House of Representatives heard that there were 63 laws
that had been drafted by foreign consultants.

These works are part of foreign aid in the form of technical cooperation or program support, whether they are in the form of loans or grants.

Indonesia is a country with an abundance of natural resources and has a strategic position in terms of global geopolitics.

Developed countries cannot just allow Indonesia to freely use up its resources. Aid is a soft way of controlling the policies of recipient countries, including Indonesia. The more the aid flows, the greater the control the foreign power has.

Third, foreign aid-supported projects have long been functioning as side jobs for raising additional income (in significant amounts) for government officials.

Almost all ministries form project offices to implement foreign aid-supported projects. Since the projects provide high income and the period is mainly short-term, the officials very often pay more attention to the projects rather than to their routine responsibilities in the ministries.

While foreign aid gives opportunities for the officials to raise additional and higher income, Indonesia will still depend on foreign aid.

Fourth, foreign aid is big business for the aid agencies. In Indonesia, the World Bank, for instance, has dozens of project offices located throughout the country with different types of projects.

The project offices are so huge that the World Bank seems to have established a parallel government in the country. Other donors also establish their own project offices, including United Nations agencies, particularly the UNDP.

The presence of these agencies’ offices in fact shows how weak the country is, how weak the government is and how poor the country is in the eyes of the donor agencies. It also undermines the claims of the present government that it has succeeded in alleviating poverty, eradicating corruption and promoting peace in the country.

As long as the government is still perceived as weak, corrupt and susceptible to conflict and government repressive measures, those who are active in the aid business will trap Indonesia into dependence on foreign aid.

Indonesia will remain a haven for those in the aid business. Hence, it is very unlikely Indonesia will ever give up foreign aid.

The writer is executive director of International NGO Forum on Indonesian Development (INFID), participating in the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea.

horrible bosses trailer|yosemite|paz de la huerta|shannen doherty|president obama

No comments:

Post a Comment