Created in Canva
From the early days of Indonesia's independence and the Suharto’s military dictator era through to the present, World Bank projects have never demonstrated a commitment to the Indonesian people; instead, they have favoured autocratic capitalist rulers. In the early years of the Republic of Indonesia, the Netherlands utilised war reconstruction funds from the World Bank to launch military aggression against independent Indonesian territory, resulting in the loss of hundreds of thousands of Indonesian lives. During the New Order era, the World Bank turned a blind eye to—and even supported —Suharto’s corrupt military regime. To this day, World Bank funds are allocated to projects that have adverse environmental impacts, threaten local communities' living spaces, and violate human rights and women's rights. As of 2024, Indonesia's external debt to the World Bank Group stands at USD 21.4 billion owed to the IBRD (International Bank for Reconstruction and Development, commonly known as the World Bank) and USD 185 million owed to the IDA (International Development Association, another member of the World Bank Group). Indonesia's total debt to the World Bank is projected to reach USD 22.2 billion by 2026. Between 1970 and 2003, Indonesia received USD 139 billion in loans and repaid USD 164 billion. Even after these repayments, the country’s external debt kept rising. During this period, total repayments were 46 times the original loan amount, and since 1985, yearly repayments have always exceeded new loans. The World Bank's Crimes Against the Indonesian People 1 World Bank's offences against the Indonesian people include: 1.Facilitating Dutch Military Aggression against Indonesia In 1947, the World Bank approved a USD 195 million loan to the Netherlands two weeks before Dutch military operations began in Indonesia. Between 1947 and 1949, the Netherlands conducted two military campaigns, deploying 145,000 troops to reoccupy Indonesian territory and access natural resources to support its post-war recovery. The flexible terms of the World Bank loan allowed the Netherlands to use these funds for various purposes, including military activities. This contributed to nearly 100,000 casualties among Indonesian soldiers and civilians.
2. Support for Suharto Military Dictatorship The World Bank continued to support Suharto’s military dictatorship despite being aware —based on an internal memorandum—that corruption, political repression, and human rights violations were rampant, particularly during the final years of his 32-year rule. At least 20–30% of development funds were diverted to bureaucrats and politicians. In early 1999, an internal World Bank evaluation admitted that its officials had turned a blind eye to structural corruption and financial irregularities to maintain a narrative portraying Indonesia as a "success story" of World Bank-supported development. By upholding this narrative, the World Bank effectively granted the Suharto regime international and national legitimacy, strengthening its power and stifling public criticism. This type of structural negligence laid the groundwork for corrupt leadership in Indonesia, ultimately leading to the suffering of hundreds of millions of Indonesian people. 3. The Green Revolution: Marginalisation of Small-Scale Farmers and Women, and Destruction of Traditional Agriculture From 1965 to 2005, the World Bank provided about USD 2 billion in loans to expand intensive rice farming across the archipelago. Of this, USD 458 million went to chemical fertiliser distribution and USD 337 million supported agricultural research and extension systems with strict management. Rice production increased by 183% between the 1960s and mid-1980s. However, this focus on productivity led to environmental problems, such as heavy chemical use, soil degradation, and more pest outbreaks The program required farmers to plant high-yielding rice varieties, which led to ecological monocultures and reduced local biodiversity. Traditional seeds, intercropping, and agroecological practices that once kept ecosystems balanced were pushed aside. Without crop diversity, pests spread quickly, as seen in the brown planthopper outbreak that destroyed millions of tons of rice. Over time, chemical fertilisers reduced soil fertility and polluted groundwater and springs. The program also made farmers dependent on buying fertilisers and pesticides, raising production costs. Many farmers found that their harvests did not cover these expenses. Moreover, the Green Revolution package included high-yielding seeds, pesticides, chemical fertilisers, and farm machinery. Access to these depended on official distribution networks and bank loans, which required collateral. Wealthy farmers could get credit and make profits, but smallholders often fell into debt and had to sell their land. The transition to high-yield crop varieties (HYVs) shifted agriculture from a self-sustaining system to a capital-intensive industry, widening the wealth gap in rural communities it also caused socioeconomic impoverishment, particularly among smallholder farmers. Mechanisation and commercialisation of the harvest weakened traditional communal customs like gotong-royong (cummunity cooperation) and replaced them with the tebasan system, where the standing crop is sold to a middleman. Women lost their place in the agricultural workforce as the traditional ani-ani (handheld rice knife) was replaced by mechanical sickles and motorised threshers. Jobs that once involved many women are now done by just a few machine operators, usually men. This change has pushed female 2
farmers out of seasonal work, income, and social roles. Fast changes in organisation and technology have also weakened close village fabrics and reduced social support, including community funding for local public goods. State authorities ran the program from the centre and enforced it strictly. Farmers who did not use government-approved seeds faced political pressure or were labelled as anti- development. State control over agriculture let agencies like BULOG (the national food logistics agency) hold a monopoly over trade. Without accountability, this caused price inefficiencies, market distortions, and corruption. Another result was forcing rice cultivation in areas where it was not traditionally grown and making rice the staple food for Indonesians. This reduced dietary diversity in regions outside Java, where sago, maize, tubers, and legumes were once common staples. It also caused the decline of traditional dry-field farming and gardening. 3 4. Transmigration: A Program That Seized Living Space The transmigration program (transmigrasi) was a government-sponsored initiative that permanently relocated people from Indonesia's densely populated islands—mainly Java, Bali, and Madura—to less populated outer islands such as Sumatra, Kalimantan, Sulawesi, and Papua. The World Bank financed five of seven transmigration projects between 1976 and 1983, including USD 30 million in 1976 to move 4,500 families to a site in Sumatra and rehabilitate a site already inhabited by 12,000 families. Each family was promised five hectares of land. Loan support continued through Transmigration Programs II–V, with a budget exceeding USD 500 million, including funding for land clearing. The program relocated approximately seven million people from Java and Sumatra to other islands across the archipelago. It often seized customary land in destination areas, transferring indigenous customary lands without consent for transmigration settlements and agriculture. Many resettlement sites were inadequately prepared—regarding institutional arrangements, funding, land preparation, and legal certainty—leading to agrarian conflicts between transmigrants and local and indigenous populations. Although transmigrants were issued land certificates, indigenous communities struggled to secure recognition of their rights to customary land. Transferring customary land without consent triggered agrarian and social conflicts among indigenous communities, local populations, and transmigrants. During the New Order era, transmigration was also used to forcibly relocate groups that opposed development projects, including villagers who resisted the Kedung Ombo project. Vulnerable groups—such as the elderly, the sick (including leprosy patients), beggars, and the homeless—were also forcibly relocated. They were rounded up and loaded onto army trucks at night, taken to "transit camps," and subsequently trained and relocated. Framed as a "development program" to boost productivity in new locations, the initiative also functioned as an eviction scheme that displaced marginalised groups and suppressed resistance to development projects.
4 5. Liberalisation of Plantation Sector and Deforestation In addition to the World Bank-supported transmigration program, which caused the loss of approximately 3.2 million hectares of Indonesian forest between the 1970s and 1990s for unsustainable agricultural schemes, the IMF and World Bank pushed a 50-point policy package to address Indonesia's 1997 economic crisis. This package demanded the liberalisation of the palm oil plantation sector, a primary driver of deforestation. Point 39 required Indonesia to eliminate "all formal and informal barriers to investment in palm oil plantations." This provision intensified pressure to convert forests into plantations. One manifestation of this pressure was a USD 33.3 million loan from the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to Wilmar Trading. Wilmar Trading is part of Wilmar International, the world's largest palm oil plantation owner, with a total agricultural landholding of 234,334 hectares. As of December 31, 2025, approximately 66% of that land was located in Indonesia. This means Wilmar International held around 154,660.44 hectares of palm oil land in Indonesia—a vast expanse capable of causing massive disruption to ecosystem balance and biodiversity. Transmigration policies also intruded upon personal lives. Marriage was a mandatory criterion for selection; marriage certificates and family registration cards were prerequisites for participation. Forced marriages were sometimes arranged for single individuals solely to satisfy administrative requirements prior to departure. Such interference curtailed the fundamental right to make free life choices. For women, forced marriage increased the risk of domestic violence, while uprooting them from their home communities weakened their social support networks. Women lost not only access to land but also control over their bodies and life choices, as well as the protective embrace of their original communities. The World Bank, as the primary financier of the transmigration program, played a role in supporting the recruitment of vulnerable groups—including the homeless and political prisoners—for placement in the most remote and undesirable transmigration sites. Powerful economic interests underpinned the social and political justifications: boosting foreign trade and attracting large-scale transnational investment, particularly for industrial plantation projects involving land clearing for crops such as rubber, coffee, and palm oil. These aims drove increased plantation output, which could boost Indonesia's exports but also led to irreversible deforestation outside Java. Ultimately, the high cost of transmigration relocation—about USD 7,000 per family—far outweighed the results. A 1986 World Bank study revealed that 50% of transmigrant families lived below the poverty line, while 20% lived below subsistence levels.
The IFC also financed a nickel industrial zone that caused environmental damage on Obi Island, North Maluku. Records show that the IFC provided a medium-term loan to OCBC NISP valued at IDR 2.75 trillion (equivalent to USD 200 million) in August 2020. The project is situated in Kawasi Village—home to the Obi Island Industrial Estate—which is surrounded by nickel mining pits covering 91 km² (more than half the village's total area) and serves as a hub for nickel processing plants and other industries. The Obi Island Industrial Estate has caused extensive deforestation, destroyed marine ecosystems, contaminated water sources, polluted the air, affected the local community, threatened bird biodiversity, sparked land disputes, and led to forced evictions. 5 6. Kedung Ombo – 40 Years of Seeking Justice The World Bank provided USD 156 million for the Kedung Ombo Multipurpose Dam and Irrigation Project, as part of a total investment of USD 283 million. The Export-Import Bank of Japan, later merged into the Japan Bank for International Cooperation (JBIC) in 1999, also contributed. Construction started in 1984, flooding about 5,898 hectares and forcing around 5,268 families from 37 villages in the Boyolali, Sragen, and Grobogan regencies to leave their homes. The land acquisition for Kedung Ombo began in 1985 and proceeded by force, with both civil and military personnel involved. Central authorities controlled the process, and villagers were not informed nor consulted beforehand. They were forced to accept very low compensation, only 200 rupiah per square meter, which was about the price of a single pack of cigarettes and much less than the market value of the land at that time. In addition to the low payments, the government did not provide alternative land for resettlement. As a result, many villagers refused the compensation. Even after 40 years, many people still live near the Kedung Ombo Reservoir, facing isolation and poverty. The project has caused lasting social, economic, and psychological harm to those who were displaced. It removed the land that was their main source of work and income. Many of these people were farmers who owned fairly large plots, and they lost both their homes and their livelihoods. To survive, some have become fishers or farm the land that appears when the reservoir dries up in the dry season. In parts of Kemusu District, some residents still have not received any compensation. About 33.5% of those affected still have not received any compensation. A quarter of residents received only Rp 99 per square meter, while 32% received Rp 250 per square meter, and 13.2% received Rp 300 per square meter. Some people joined the transmigration program and moved to Bengkulu and Jambi provinces. But for many who were sent to Lubuk Pinang District in Muko-Muko, Bengkulu, life has been very hard. The peat soil on their new land made farming almost impossible because it was waterlogged and needed expensive drainage before it could be used. Today, Kedung Ombo villagers in Muko-Muko still live in poor conditions. Their hope that transmigration would give them a decent life, similar to what they had before, has not come true.
6 7. Triggers of the Economic Crisis and Imposed Neoliberal Economic Packages Between the early 1980s and early 1990s, the World Bank and IMF encouraged Indonesia to liberalise its financial sector and allow foreign capital to move freely. This meant deregulating finance, removing tariffs, and opening capital markets to foreign investors. As a result, Indonesia became more connected to global markets but also more exposed to international financial risks. In 1997, a major economic and financial crisis hit Southeast Asia. The Rupiah lost 229% of its value against the US dollar, dropping from Rp 2,400 to Rp 16,000 per USD. This led to a huge outflow of foreign capital, worsened the liquidity crisis, and put heavy pressure on banks. Many companies, especially in manufacturing and services, went bankrupt. Unemployment soared. By the end of 1998, about half the population lived below the poverty line, set at USD 0.55 per day in cities and USD 0.40 in rural areas. Prices for basic goods rose sharply, people’s buying power fell, and millions became part of the "new poor." During the crisis, the IMF and World Bank told the government to turn private banking debt into public debt. Before the crisis in 1997, Indonesia’s public debt was 23% of its GNP, but by 2000 it had jumped to 93%. This left little room in the budget to help people. Real wages, which had grown by 46% from 1990 to 1996, fell by 25.1% in 1998. As prices rose and incomes dropped, people could afford less. Soeharto had to cut subsidies for basic needs, which made the prices of kerosene, electricity, and gasoline rise by 70%. This led to even more public protests. Fifteen days later, after losing support from Washington and facing public anger, Soeharto resigned, ending his 32-year rule. The IMF and World Bank’s structural adjustment package was based on neoliberal paradigm. It required Indonesia to remove social subsidies considered unproductive, such as those for education and health, privatise state-owned companies such as electricity and water utilities, open the country to free trade, and deregulate to support these changes. The World Bank and the Asian Development Bank also provided technical assistance and loans to privatise state-owned electricity and water companies. For the women of Kedung Ombo, losing their homes has made life even harder. Besides caring for their families, they have had to find extra work because their husbands' incomes are not enough to meet daily needs. Some women now work as fishers, traders, seamstresses, or farm on tidal lands. Even now, the people of Kedung Ombo are still asking for justice. They want the Indonesian government to apologise for what happened, reopen the case, and solve the remaining problems. This includes fair compensation, humane relocation for affected residents, the construction of essential facilities such as schools, healthcare, roads, and economic support for the Kedung Ombo community.
7 11 8. Support for Geothermal as a False Climate Solution The World Bank began supporting geothermal projects in Indonesia in 2008 with a USD 5 million GEF grant to address policy and institutional challenges, build technical skills, and reform the sector. In 2011, it gave a USD 300 million loan to Pertamina Geothermal Energy (PGE) to expand power plants in Ulubelu (Sumatra) and Lahendong/Tompaso (Sulawesi). In 2015, a joint study with the ADB, Unlocking Indonesia's Geothermal Potential, highlighted the need for regulatory changes to attract private investment. From 2016 to 2017, the World Bank provided grants for a Geothermal Upstream Development Project in Eastern Indonesia. In 2018, in co-financing with the Green Climate Fund (GCF), the World Bank gave a loan for the Indonesia Geothermal Resource Risk Mitigation Project (GREM), which helped fund the exploration phase, a major challenge for private developers because of high costs. GREM funds were distributed through PT SMI for the Wapsalit geothermal power plant on Buru Island, Maluku. World Bank-funded geothermal projects in Indonesia have led to several environmental and social issues: At the Lahendong Geothermal Power Plant in North Sulawesi, rice and vegetable yields have fallen sharply. People living nearby have been exposed to hot steam and the smell of sulfur gas, and water for rice paddies and fish ponds has become less available and of lower quality. Drilling and plant operations have shaken the ground, cracking the floors and walls of local homes. Many residents are still worried about the long-term effects of years of development on their land and lives. The plant has also employed very few local workers. Building the Ulubelu Geothermal Power Plant in Lampung required clearing forests and plants to make way for pipelines, boreholes, and roads. This reduced green spaces and wildlife habitats. As the project grew, local coffee and vegetable farmers lost some of their farmland. The Mataloko Geothermal Power Plant in Flores has caused major environmental problems. Uncontrolled bursts of hot, corrosive mud and hydrogen sulfide gas have spilt onto local land, damaging farms by covering them in mud and exposing them to toxic gas. As a result, important crops like coffee, cloves, avocados, and vegetables have withered and died. Indigenous communities in Jailolo, North Maluku, have resisted the Telaga Ranu Geothermal Working Area (WKP). The project requires 16,650 hectares of land and threatens their ancestral lands, the environment, water sources, and community farms. Another nearby drilling site also endangers Air Cipu, a place historically important to people in Idamdehe.
In light of the World Bank's harmful actions against the people of Indonesia, we demand the following: 1.The World Bank should be held responsible for the problems it has caused, especially the harm to women, local communities, Indigenous peoples, and future generations. Its actions have led to land loss, deforestation, conflict, gender injustice, loss of homes, and ongoing poverty. 2.Indonesia should stop repaying its World Bank debts. These debts have already been paid back many times and have caused serious social and environmental harm, supported rights violations, and helped keep corrupt and autocratic regimes in power. 3.The World Bank must pay reparations for the losses and damages its programs and projects have caused the Indonesian people. These reparations should restore rights, dignity, livelihoods, culture, and the environment, and ensure that such harm does not happen again. 4.The World Bank should stop its involvement in climate finance. Climate finance should not create new debt, as it leads to debt dependency and puts a heavy financial burden on Indonesia, which is already facing a debt crisis. International public funding for development and climate solutions should not rely on debt- based tools so that we can avoid worsening ecological, climate, and social problems. 8
9 References Carrere, R. (2002). World Bank in the Forest, WRM Briefing. https://www.wrm.org.uy//fr/files/2013/01/World-Bank.pdf Indri, N (2023). Bagaimana Keterlibatan IFC di Kawasan Industri Nikel Obi Menghancurkan Pulau Obi. Trend Asia. https://trendasia.org/wp- content/uploads/2023/11/bahasa-indonesia-ifc-in-obi-.pdf Internasional Finance Corporation (IFC), Project Wilmar Trading, IFC disclosures portal, at: https://www.ifc.org/en/disclosures/project-detail Jarot Bayu, Dimas, (2018), Pembangunan Waduk Kedung Ombo Mewariskan Kemiskinan Menahun, katadata.co.id at: https://katadata.co.id/berita/nasional/5e9a55bd05e48/pembangunan-waduk-kedung- ombo-mewariskan-kemiskinan-menahun? Rheem, DL (1986), Environmental impact of third-world development. Protesters say World Bank finances schemes that harm rain forests, Christian Science Monitor. https://www.csmonitor.com/1986/0930/arain-f.html Toussaint, E. (2014), The World Bank and the IMF in Indonesia: an emblematic interference, Intenasional viewpoint online, at: https://internationalviewpoint.org/The- World-Bank-and-the-IMF-in-Indonesia-an-emblematic-interference Tim Okezone (2024), Ternyata Segini Utang Indonesia di Bank Dunia, Okezone finance, at: https://economy.okezone.com/read/2024/06/27/320/3026704/ternyata-segini-utang- indonesia-di-bank-dunia?page=2 Wibisono, Kunto, (2008), Kehidupan Warga Trans Bedol Desa Kedung Ombo Memprihatinkan, Antara, https://www.antaranews.com/berita/123718/kehidupan-warga- trans-bedol-desa-kedung-ombo-memprihatinkan Wilmar International Limited, Oil Palm Plantation and Milling, Wilmar International, at: https://www.wilmar-international.com/our-businesses/plantation/oil-palm-plantation-milling World Bank (1994), Report No. 12988 Indonesia Transmigration Program A Review of Five Bank-Supported Projects. https://documents1.worldbank.org/curated/en/823551468752430966/pdf/multi-page.pdf
Jalan Kalibata Tengah XVII B No. 25, Kalibata, Kecamatan Pancoran Jakarta Selatan 12740, Indonesiaofficial.aksiforjusticeofficial.aksiforjusticeaksiforjustice.idAksil for Juctice