The opinion-page article ``Indonesia Mafia Pockets World Bank Loans,'' June 3, is a flagrant misrepresentation of the World Bank's relationship with the government of Indonesia.
The authors base their conclusions on a simplistic and fundamentally unsound attempt to link World Bank loans (which are not ``US backed'') and Indonesia's military spending. The two are not linked, even indirectly, as anyone with a passing knowledge of the World Bank's lending would appreciate. To suggest otherwise displays an ignorance of the World Bank's lending criteria and history.
The first point in need of an answer is the allegation that the bank ``cooked its own books'' to understate Indonesia's poverty level. The Bank's analysis of poverty reduction in Indonesia and elsewhere is based on standard methodology, widely explained and discussed.
Analyses of poverty levels can vary for a variety of factors (by region, depending on whether income or caloric intake is the basis, etc.), but in Indonesia's case the outcome is uniformly impressive.
The numbers have been looked at many times and there is no suggestion that they are inaccurate. And why would the bank want to ``cook the books''?
Also of concern is the implication that the bank should act as a human rights organization, an arms control agency, a political consulting firm, and an agency to enforce the Helsinki accords. The World Bank is owned by 177 countries and operates within rules laid down by those countries. Individual countries are free to send bilateral aid how and where they wish, but the World Bank is an aid agency, not an arm of government.
We have no mandate to interfere in the political workings anywhere. Those who suggest otherwise are not familiar with the Articles of Agreement and do not realize the sheer impossibility of asking the Bank to be all things to all people.
Even so, we do take military spending into account - as an economic issue - and it is instructive that Indonesia's military spending, as cited by The Economist on April 16, was among the lowest in all of East Asia at 1.4 percent of gross domestic product.
The truth is that Indonesia has made significant strides in alleviating poverty over the past generation, cutting the percentage of absolute poor from 60 percent to 15 percent in 25 years and, in that time, has also achieved food self-sufficiency. That is a record that no one, not even the most vitriolic single-interest group, can deny. Peter Stephens, Washington External Affairs Officer, East Asia and Pacific Region The World Bank
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