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There are two categories of international aid: Loans and grants. The amount of
loans provided is usually large, while grants are for small projects. Subsequently,
a nation aims to stimulate related loan-based activities/programs or to gain
support both socially and politically from civil society and other stakeholders
during program implementation.
For the purposes of this discussion, the most important thing to keep in mind is
that beginning with the initial stage, after the two parties (donor agency and
related government officials) have agreed to the basic principles of the
development aid, the cost for project preparation is part of the country's loan.
This stage usually takes more than a year (an average of two years) and involves
very expensive experts (consultants). In other words, the recipient country also
uses the loan to pay for the experts -- who are mostly foreign nationals.
It means that from the beginning of the loan, most of the money tends to be sent
off abroad (to the experts' origins), and only a small amount of the money goes to
local beneficiaries through the local experts.
It appears that the government/executives are not obliged to involve those two
parties in the loan-negotiating process. It seems that parliament and NGOs
merely need to know the amount and purpose of the loan once the government
reaches an agreement and adds it to the state budget as a funding source for any
development project for the next fiscal year.
This process that does not involve the people's representatives (parliamentarian
and/or civil groups) is very ironic and must be evaluated. Why?
First, the legislative body is mandated to fight for the people's interests in the
policy-making process -- including development agendas.
Generally speaking, due to their positions and daily activities, civic groups are
very close to local communities, and know more about their dynamics, cultures,
interests and demands.
Second, it should be kept in mind that loans are heavy burdens for future
generations. Obtaining loans by using its natural resources as the guarantee
appears to be easy, especially for a country such as Indonesia which is very rich in
natural resources. Many countries as well as donor agencies are interested in
loaning money to such countries and subsequently are involved in this process of
exploitation.
Indeed, loan management in Indonesia (in the reform era) has changed slightly.
But, to some extent, I personally think that donor agencies are also trapped by
their own conservative situations. Based on certain requirements, consultant
companies are allowed to join tender and are then listed as permanent business
partners of the donor agency -- regardless of the quality of their work.