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Wolfowitz Challenged to Address Corruption

Reaction to World Bank President Paul Wolfowitz’s Remarks on Corruption Today

Jubilee USA and East Timor and Indonesia Action Networks Challenge Wolfowitz to Address Roots of Corruption by Canceling Indonesia’s Suharto-Era Debt

WASHINGTON – As World Bank President Paul Wolfowitz unveiled his much anticipated framework to fight corruption at the World Bank today in
Jakarta, Jubilee USA Network and East Timor and Indonesia Action Network today urged a bolder and more comprehensive approach, including efforts to meaningfully address its past corrupt lending to the impoverished country, especially under former dictator Suharto.

The East Timor and Indonesia Action Network argues that if President Wolfowitz is truly concerned about corruption in Indonesia, the World Bank must acknowledge its role in fostering corruption in the impoverished country through 30 years of lending to the kleptocratic Suharto dictatorship. The Bank’s lending to Suharto enabled the military to continue to abuse human rights not only in Indonesia but in the now-independent state of East Timor.

“The people of Indonesia suffered greatly under the Suharto dictatorship. They should not be made to suffer again by being forced to pay back his debt,” said John M. Miller, National Coordinator of the East Timor and Indonesia Action Network. “Any effort to end corruption in Indonesia must tackle its most corrupt institution. The
Indonesian military is deeply involved in businesses, illegal and legal, receives protection payoffs from foreign corporations, and remains largely unaccountable to its civilian leadership.”

Jubilee USA Network and the Indonesian Anti-Debt Coalition call on the World Bank and other Northern creditors to cancel Indonesia’s odious and illegitimate debt. The combination of persistent and wide-spread poverty in Indonesia and the odious nature of Suharto-era debt provide a compelling argument for the 100% cancellation of Indonesia’s debt. Such cancellation must come without harmful economic conditions attached. In US Senate testimony, Northwestern University professor Jeffrey Winters found that at least one-third of World Bank loans to Suharto were stolen by his regime.

“Many of the major lenders - the World Bank, International Monetary Fund (IMF), the Asian Development Bank and some G-8 countries - made large loans to the Indonesian government during Suharto's regime knowing that significant amounts would either be used to oppress the people or would be lost to corruption,” argues Ardi St. Majo Endah, Coordinator of the Anti-Debt Coalition (KAU) in Indonesia. “As a result, a growing number of voices both inside and outside Indonesia are calling for the cancellation of Indonesia's debt not only as a question of charity or meeting human needs, but as a question of justice.”

In addition to canceling Indonesia odious debt, Jubilee USA Network argues that a comprehensive approach to corruption would include the development and implementation of clear standards for responsible lending, assuring transparency/accountability, human rights, and environmental sustainability to avoid the creation of new odious debts in the future.

Jubilee USA Network is the US arm of the international movement working for debt cancellation for impoverished nations. Jubilee
USA is a network of 75 religious denominations and faith-based groups, labor groups, environmental organizations, and community and advocacy groups working for freedom from debt and economic justice for countries in Africa, Asia, and Latin America. See http://www.jubileeusa.org/

The East Timor and Indonesia Action Network was founded in November 1991 to support genuine self-determination and human rights for the people of East Timor. ETAN advocates for democracy, justice and human rights for East Timor and Indonesia. ETAN calls for an international tribunal to prosecute crimes against humanity committed in East Timor from 1975 to 1999 and for restrictions on U.S. military assistance to Indonesia until there is genuine reform of its security forces. For additional background, see http://www.etan.org

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