Indonesia:
World Bank urged not to release funds

The World Bank (WB) is expected imminently to decide to release half of 
a planned US$600 million Social Safety Net Adjustment Loan (SSNAL) to 
Indonesia. The WB placed a hold on the $600 million loan — after approving 
it in May — due to concerns about past abuses of SSNAL funds and fears 
about their misuse during Indonesia's elections. Indonesia has a history of 
misusing international funds to influence elections.

Indonesian activists requested that the funds be blocked until the 
establishment of a new government, but the World Bank only agreed to block 
the funds until the first stage of the June 7 national Indonesian election.

According to a coalition of over 400 Indonesian and East Timorese 
organisations, there is evidence of significant abuses of Social Safety Net 
Funds in East Timor, "most of which are connected to the pro-integration 
campaigns and the support of pro-integration militias who are proven actors 
of terror and intimidation towards the East Timorese population".

They are calling on the World Bank to make clear that aid to Indonesia is 
contingent on a free and fair UN ballot in East Timor and peaceful 
transition to East Timor's new political status.

The WB listed 25 problems ("Complaints") with the SSNAL programs. Indonesia 
is supposed to fix 10 of them to get half the funds.

One of these involved a threat by the Bupati (district head) of Ambeno to 
withhold poverty aid from villages who failed to attend meetings promoting 
autonomy for East Timor.

Indonesia says they have satisfactorily addressed 10 Complaints and should 
now get the money. Clearly, they haven't addressed the Complaint pertaining 
to Ambeno, nor considered many other potential complaints concerning still-
occupied East Timor.

Leaked local government documents from East Timor show that SSNF were given 
approval to pay civil defence units (CDUs), some of which incorporate 
paramilitary militias whose violent activities threaten to derail the 
August vote on the territory's political status.

Activists on behalf of East Timor, West Papua and Indonesian democratic 
rights want all World Bank sectoral and structural adjustment loans to 
Indonesia to be further suspended until after Indonesia stops paramilitary 
violence in East Timor, until after a free and fair vote in East Timor, and 
preferably until after a peaceful transition of government following the 
presidential elections in Indonesia.

Continuing Indonesian military violence in Aceh and other areas of 
Indonesia, as well as West Papua and East Timor, is of grave concern. 
Within the last two weeks Indonesian forces have killed scores in separate 
attacks in Aceh.

In addition to the 25 World Bank-identified Complaints, severe violations 
involving the misuse of international assistance have been reported in East 
Timor as well as in Indonesia.

One significant example involves vast quantities of rice provided by World 
Bank programs in East Timor misused by Indonesian military forces and 
distributed by paramilitary units.

This violates the intention of relief aid and hands human rights abusers 
another tool of coercion and intimidation.

A recently leaked World Bank report illustrates a reluctance by the WB to 
take action on known instances of Indonesian corruption.

Essentially, Bank officials were aware — long before their public release 
— of leaked Indonesian occupation government documents spelling out the 
approved misuse of Social Safety Net funds in at least three regencies in 
East Timor.

These funds were ear-marked to support both pro-autonomy campaigning (in 
contravention of the May 5 UN agreement) and civilian militia 
(paramilitaries).

On July 17, the US-based East Timor Action Network urged the World Bank and 
other donors to postpone any aid to Indonesia until after East Timor votes 
for autonomy or independence.

Indonesia should not be rewarded for refusing to live up to its 
commitments. Under the May 5 UN agreement setting up the vote, Indonesia is 
supposed to stop paramilitary violence in East Timor, and its officials are 
not allowed to campaign.

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East Timor Action Network (USA)