September 12, 2000
World Bank President James D. Wolfensohn sent a letter last week to Indonesian President Abdurrahman Wahid warning that continued financial support for the southeast Asian archipelago may be linked to the success of its efforts to quell militia groups in western Timor. "I would ask you to do your utmost to stop the violence before any more innocent lives are lost," Wolfensohn wrote in a letter delivered to Wahid in New York on Friday, just days after three United Nations relief workers were killed by a militia-led mob in western Timor.
The political nature of the letter is unusual for the World Bank, which has provided billions of dollars in loans to Indonesia and generally focuses on economic policies. The 20 countries and agencies that are the biggest donors to the bank's Indonesian programs are due to meet in mid-October. "I look forward to being able to report to donors at next month's Consultative Group meeting that the violence has ended, that the United Nations has been able to resume its humanitarian activities and that those who want to return home to East Timor are now being allowed to do so in safety," Wolfensohn wrote.
Reminding Wahid that Indonesia still needs financial support and investor confidence, the bank president pointedly added that "this is ... an issue watched closely by the international community."The World Bank has $5.5 billion in outstanding commitments to Indonesia, of which $2.8 billion has not been disbursed. That includes money for 64 specific projects as well as structural adjustment programs that help support the budget and fund social programs.In fiscal 1999, the World Bank committed itself to an additional $2.74 billion in future loans. Because higher oil prices have boosted Indonesia's revenue, new commitments in fiscal 2000 are expected to be much lower.
The unusual letter is Wolfensohn's second appeal to Indonesia for non-economic reasons. When violence broke out in the former Indonesian region of East Timor, now an independent nation, Wolfensohn warned Wahid's predecessor, B.J. Habibie, that he risked losing international financial support if he did not order the Indonesian military to stop the bloodshed.
On Friday, Wolfensohn reminded Wahid of that earlier message. He also joined a growing chorus of international leaders who have become exasperated by Wahid's failure to make good on repeated promises to bring western Timor under control. Defense Secretary William S. Cohen is scheduled to travel to Jakarta soon, and a Pentagon official said the troubles in western Timor are "on our front burner."
About 100,000 refugees from last year's violence in East Timor remain scattered among 300 camps in the Indonesian region of western Timor. Those refugees, as well as U.N. relief workers, have been subjected to violence by militias that operate extensively despite the presence of Indonesian military units. The deaths last week of the three workers for the U.N. High Commission on Refugees "raise more questions about why the violence is allowed to continue," Wolfensohn wrote to Wahid. He added that despite Wahid's previous assurances, "the situation grows more dangerous and urgent by the day.
"Wahid assured U.N. Secretary General Kofi Annan last week that he was sending two fresh battalions of Indonesian troops to the area. Wahid has pointed to the detention of 15 suspects in the attack on the U.N. relief office as evidence of Indonesia's desire to respond. Human Rights Watch and the Indonesian Human Rights Commission on Saturday called for an independent investigation into the killings, condemning as inadequate a 10-person team established Friday by the provincial police command in western Timor.
"Unless the government can impose its authority on lawless and criminal elements, including those within its own armed forces, the transition to democracy is going to fail," said Sidney R. Jones, director of the Asia division of Human Rights Watch.
News Release No:
2001/060/EAP
World Bank Response To Today's Washington Post Article
WASHINGTON, September 12, 2000--Today's article in the Washington Post, entitled "World Bank Chief Warns Indonesia on Militias", describes the letter sent by World Bank President James D. Wolfensohn to President Abdurrahman Wahid regarding recent developments in West Timor. The letter was sent on September 8 and the quotes in the article are correct. However, the article does not convey the overall supportive tone of the letter. Contrary to some reports, the World Bank has no plans to cut assistance or delay the CGI meeting. However, we are concerned that events in West Timor will have a negative impact on international sentiment toward Indonesia affecting donor support and investor confidence. It is in this context that Wolfensohn encouraged President Wahid to take concrete steps as soon as possible to end the violence in West Timor, enable the resumption of UN humanitarian activities, and allow refugees who want to return home to do so in safety. Together with the recently signed LOI, and other positive steps by the Government of Indonesia, these actions will provide the basis for a successful CGI meeting in Tokyo next month.
More Information on East Timor
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