Down to Earth IFIs Factsheet 8: Current World Bank Lending

IFIs in Indonesia

This series of monthly factsheets on International Financial Institutions (IFIs) will include information on the World Bank Group, the International Monetary Fund (IMF) and the Asian Development Bank (ADB), focussing on their involvement in Indonesia.

This fact sheet takes a closer look at World Bank lending to Indonesia.
For introductory notes on the World Bank see Factsheet One

It focuses on selected loans that have potential impacts on the Environment and Natural Resource Management. The full current list of World Bank Loans to GoI is contained within 'INDONESIA - BRIEF ON ONGOING PORTFOLIO' available from the World Bank Public Information centre at the WB Offices in Jakarta.

The fact sheet is split into two areas - SALs (Sectoral Adjustment Loans) and Non-SALs. SALs are the more controversial of World Bank loans as they aim to change the structure of an economic industry or sector. Often this means privatisation, de-regulation or liberalisation. Critics of the Bank believe this leads to faster natural resource depletion and environmental degradation. Of the other loans, the Land Administration project has come under criticism for the way it promotes the 'commoditisation of land'.

The World Bank has a much better record of openness and consultation than the IMF and ADB. NGOs can request information and consultation.

However, the Bank has an uneasy relationship with NGOs in Indonesia as the Bank was previously very close to Suharto. A leaked internal document famously noted at least 30% of loans were lost to corruption under the 'New Order'. Since then the Bank in Jakarta has attempted to build better relations through initiatives such as the 'Letter of Intent - Commitments Made by the World Bank to the Indonesian People'. This agreement committed the Bank to release all documents on operations and carry out an audit of Suharto era lending by January 1, 2001.

For best results fax requests/complaints etc. on official headed letter paper, rather than e-mail.

The aims, contents, status and further information on SALs are shown in Table 1. This information was based on interviews with World Bank staff in the Jakarta Office in August 2000. It cannot be 100% guaranteed due to the fluid nature of relations between the WB and Indonesian government (GOI) - changes can occur.

Three current non-SAL loans from the World Bank to GOI are listed in Table 2. In general these projects have much smaller budgets than SALs but, as their initial target areas are more localised the direct impacts on local communities and environments may be greater. Other projects will be included in a later Factsheet.

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Loan Name	AGSAL AMOUNT UNDECIDED NO LOAN ID NUMBER
Aim	Agriculture Sector Adjustment
Status	'Non-active…Dead….Discussed in 1999….Never appraised….Not under consideration'

Loan Name	FORSAL AMOUNT UNDECIDED NO LOAN ID NUMBER
Aim	Forestry Sector Adjustment
Status	'Probably cancelled soon, but not sure….unlikely, but forestry conditions in other loans - in IMF 1998; PRSL I, April 1998 and PRSL II, April 1999'
Next decision date	'Soon'
Contact Task Manager Person in charge in the WB office in Jakarta	USA - Jim Douglas Jakarta - Tom Walton



Loan Name	PRSL AMOUNT - PRSL III = US$ 300m NO LOAN ID NUMBER See http://www.worldbank.org/html/extdr/offrep/eap/projects/prslii/prsliiexecsum.htm
Aim	Policy Reform Loan.
Status	PRSL I and II are fully disbursed 'PRSL III increasingly unlikely.' PRSL III was, however, in World Bank Monthly List of Operations in July 2000
Next decision date	Sept-Oct 2000
Contact Task Manager Person in charge in the WB office in Jakarta	USA - Burt Hofman Jakarta - Vicrim Nehru


Loan Name	SSNAL AMOUNT US$ 600m LOAN 4471-IND See http://www.worldbank.org/html/extdr/offrep/eap/projects/ssnal/ssnalexecsum.htm
Aim	Social Safety Net Adjustment Loan. Also known as JPS - cheap rice, job creation etc.
Status	'First tranche of US$ 300m released. Second Tranche was to be June 2000, but delayed due to conditions not met….Waiting now to see if conditions met by December 31, 2000. If they are not, it is dead…However the money remains pledged and will form part of another SAL, if there is no SSNAL.'
Next decision date	By Dec. 31st, 2000
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - Janet Pomeroy


Loan Name	WATSAL AMOUNT US$ 300m LOAN ID 4469-IND See http://www.worldbank.org/html/extdr/offrep/eap/projects/watsal/watsalexecsum.htm
Aim	Water Sector Adjustment Loan '..to improve management of irrigation systems…Working group to be set up will discuss user charges… Improve national management of water.
Status	'Active loan. US$50m disbursed of US$300m…slow dis-bursement of second tranche. US$ 200m should be in coming two months…Third tranche will be US$ 150m.'
Next decision date	'In next two months…closing date 31 December.'
Contact Task Manager Person in charge in the WB office in Jakarta	USA- Teddy Herman Jakarta - Ilham Abla


Loan Name	Governance Adjustment Loan AMOUNT UNDECIDED NO LOAN ID NUMBER
Aim	Proposed loan for conditions related to 'good gover-nance…anti-corruption'
Status	'Dead'


Loan Name	Urban Poverty SAL AMOUNT UNDECIDED NO LOAN ID NUMBER
Status	'Possibility'
Next decision date	'Don't know'
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - George Soraya


Loan Name	SECAL AMOUNT US$ 300m NO LOAN ID NUMBER
Aim	Restructuring of PLN (Indonesian State Power Company)
Status	'possibility but increasingly unlikely'
Next decision date	Proposed date of approval: mid 2001
Contact Task Manager Person in charge in the WB office in Jakarta	USA - Muhammad Farhandi Jakarta - David Hawes And Tom E. Walton


Loan Name	TELECOMMUNICATIONS ADJUSTMENT AMOUNT US$ 257.9m LOAN 3904-IND
Aim	Re-organise telecoms and restructure PT Telkom
Status	Approval Date: 6/95 Closing Date: 6/01
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - Bernard Drum And David Hawes

The following is a list of selected Current WB non-SAL Loans to GOI.
Information is taken from the World Bank's 'INDONESIA - BRIEF ON ONGOING PORTFOLIO'.

Loan Name	INTEGRATED SWAMPS DEVELOPMENT LOAN 3755-IND AMOUNT US$ 51m
Aim	'To alleviate poverty in about 20 selected swamp schemes, through further development of their agricultural potential. The project would also assist GOI manage part of the coastal zone and help ensure sound environmental practices in swamp development.'
Status	Active Loan Approval Date: 6/94
Next decision date	Closing Date: 9/00
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - Ilham Abla


Loan Name	LAND ADMINISTRATION LOAN 3792-IND AMOUNT US$ 46.1m
Aim	'To foster efficient and equitable land markets through systematic registration, improvement of the institutional framework for land administration, and long-term increase in Badan Pertanahan Nasional (BPN's) land administration capacity. To support GOI's efforts to develop long-term land management policies through a package of studies, workshops and seminars.'
Status	Active Loan Approval Date: 9/94
Next decision date	Closing Date: 3/01
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - Sumaryo Soemardjo


Loan Name	DECENTRALIZED AGRICULTURAL & FORESTRY EXTENSION PROJECT LOAN 4510-IND AMOUNT US$18m
Aim	'Enhance farmers' capacity to participate in extension activities and in strengthening the capacity of the district-level integrated agricultural and forestry extension system which would promote economically feasible, environmentally sustainable, and socially acceptable farming practices and increased farmers' income.'
Status	Active Loan Approval Date: 8/99 To be extended to cover more provinces
Next decision date	Closing Date: 3/04
Contact Task Manager Person in charge in the WB office in Jakarta	Jakarta - Sumaryo Soemardjo

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Down to Earth IFIs Factsheet Series

Focus on Current World Bank Lending to Indonesia