Subject: IPS: Donors Question Violence in East Timor
Date: Sat, 4 Sep 1999 00:37:34 +1000
From: "Ips-Vlaanderen" <IPS@ips.ngonet.be> (by way of
bfmedia@pop.peg.apc.org (BUSHFIRE MEDIA)) IPS: Donors Question Violence in East Timor
By Abid Aslam
WASHINGTON, Sep 3 (IPS) - The violence in East Timor that followed the island's ballot
on self determination this week has has cast a pall over Indonesia's financial backers.
The failure of Indonesian security forces to check anti- independence militias from
rampaging against voters suspected of supporting an end to rule by Indonesia has unsettled
the international financial institutions and governments providing loans and grants to
Jakarta.
The big question is: Has their money been used to bankroll oppression and violence, and
what are they willing to do about it?
Nearly 99 percent of the local population in East Timor turned out to vote Monday
whether to opt for autonomy within Indonesia or full independence. UN officials in the
Timorese capital of Dili, who conducted the process, say the result should be known by
next week.
Escalating violence, however, has prompted the UN Security Council in New York and the
US government to renew demands that Indonesia curb the militias activities. New Zealand is
calling for an international military force to maintain order.
Indonesia repeatedly has insisted it is in control and has rejected calls for armed
international peacekeepers but State Secretary Muladi has been quoted as saying that the
option of a UN force is now ''an alternative that has to be considered.''
Human rights and development organisations, however, say that the international
community also must follow its money more closely to root out all sources of the troubles
in East Timor.
Donors and lenders - especially the World Bank and International Monetary Fund (IMF),
chief engineers and enforcers of Indonesia's international bailout - ''need to take some
moral responsibility'', says Lynn Fredricksson, Washington representative of the East
Timor Action Network.
Groups such as Fredricksson's for months have been lobbying the World Bank to suspend
its East Timor operations and to launch a comprehensive financial audit in light of
evidence that foreign aid funds have been misdirected by local authorities to bolster
anti-independence forces.
That concern was boosted in June, when UN Secretary-General Kofi Annan reported
''strong indications that public funds have been used'' by local officials to support
pro-autonomy campaigns - in violation of international peace agreements signed in early
May.
The evidence includes leaked budget documents purportedly showing that East Timor
Governor Abilio Jose Osario Soares tried to divert more than 700,000 dollars in World
Bank-mandated 'social safety net' funds - earmarked for rice distribution, health care and
education - to the pro-autonomy cause.
The money was to be used for 'civil defence corps' in the districts of Lautem and
Ambeno as well as ''socialisation programmes'' - a euphemism for anti-independence
campaigning.
Soares has declined to comment publicly about the documents but Bank sources say he has
not denied the budget's authenticity in response to their questions.
Bank officials say their own and Indonesian government inquiries conclude that the
lending agency's funds have not been involved. ''There has been no evidence presented to
date linking our money to the militias, just allegations,'' says Bank spokesman Peter
Stephens.
The Bank's probe ''doesn't delve into details and relies too heavily on Indonesian
self-investigation,'' Fredricksson counters.
The enquiry overlooks evidence, collected by the Bank's own staff, that local forces
have controlled the distribution of social funds and donated rice, using these as leverage
over the local population, she contends.
''Whether or not World Bank or donor money was used directly to support paramilitaries
is almost irrelevant,'' she adds. ''The point is, at the very least, it frees up other
money for oppression and should be suspended until the paramilitaries are disarmed and
disbanded.''
Such a move may not be in the cards. Whatever the outcome of Monday's voting, the Bank
is ''ready to move in East Timor,'' says Jean Michel Severino, the agency's vice president
for East Asia and the Pacific.
The size and details of a direct lending programme have yet to be worked out but ''we
feel ready to help,'' he says.
The Bank committed 1.5 billion dollars to Indonesia last year, including 600 million
dollars to shore up the government's international reserves and 400 million dollars for
social programmes. Although much of the money was suspended until after national
parliamentary elections in June, officials say the loans are essential to stabilise the
economy.
Corruption has haunted the Bank's Indonesia programme and it acknowledges that
one-fifth of its financing routinely has been siphoned off - sometimes with staff members'
knowledge and possible collusion.
The lender now conditions disbursements on closer supervision and streamlined
procedures aimed at ensuring that aid ''does not pass through too many hands,'' according
to Stephens, but potential abuses remain a concern.
Meanwhile, ''the questions raised over East Timor apply far beyond it,'' says
Fredricksson, since the Jakarta government also is fighting what it sees as challenges to
its sovereignty in Aceh, West Papua (or Irian Jaya), and the Moluccas.
For that reason, political analysts argue, the international community itself is
reluctant to intervene forcefully or impose sweeping sanctions, fearful that such steps
would contribute to the break-up of an already unstable Indonesia, the world's fourth most
populous country and a long-time US ally.
Indonesia's donors in July committed 5.9 billion dollars through next March despite
concerns over graft, security and political uncertainty.
Thus the international response has been limited to ''huffing and puffing,'' says
Michael van Langenberg, head of Southeast Asian studies at Sydney University in Australia.
''The World Bank can come and wave the financial stick a little bit but I guess
everyone in Jakarta knows there's a limit to which financial sanctions can be imposed,
because that would encourage the political break-up of Indonesia,'' he argues.
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