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Critics say Wolfowitz's tenure as U.S. ambassador to Indonesia predicted current failings

Critics say Wolfowitz's tenure as U.S. ambassador to Indonesia predicted current failings

World Bank President Paul Wolfowitz, embroiled in controversy over the pay he awarded to a female companion in Washington, is being accused by critics here of failing to speak out against corruption and rights abuses while U.S. ambassador to Indonesia two decades ago.
As bank head, Wolfowitz has argued that corruption is crippling the world's poorest nations _ "the very thing he closed his eyes to" when he served as ambassador at the height of President Suharto's autocratic regime, said pro-democracy activist Binny Buchori.
"He's a hypocrite," she said. "He should quit."
Wolfowitz this week blamed unclear bank rules for creating questions about his handling of hefty pay raises for his girlfriend Shaha Riza shortly after he took over the helm of the international development agency in 2005.
The World Bank's 24-member board has promised a decision soon in the controversy, which has led to calls for his resignation.
But Jeffrey Winters, a professor of political economy at Northwestern University, said Wolfowitz's 1986 to 1989 tenure as U.S. ambassador to Indonesia already showed he was ill fit to run the World Bank.
"From the very beginning, I felt this was the wrong person for the job," said Winters.
He pointed to the radical deregulation of Indonesia's banking sector in 1988, promoted by Wolfowitz's economic team and international lenders. It "opened the floodgates for local crony conglomerates to set up private banks and take in deposits from a trusting public."
With no rule of law, there was no oversight and no supervision, he said.
"The foxes were running wild in the financial chicken coop and no one, including Wolfowitz, pressured the Indonesians to design safeguards to protect the public's deposits," he said. One result was the 1997-98 financial crisis "that plunged tens of millions into abject poverty."
Suharto, who ruled for 32 years, was toppled in 1998 by pro-democracy demonstrations.
The former dictator's family has been accused of embezzling an estimated US$35 billion in state funds during his regime, according to corruption watchdog Transparency International. Hundreds of thousands of people were killed under the dictator's brutal reign.
Supporters say Wolfowitz pushed quietly for economic and political reforms. One example: a call for greater openness at his farewell speech at Jakarta's American Cultural Club in 1989.
"I wouldn't say it was brave, after all he was moving on," said James Castle, a former head of the American Chamber of Commerce, adding that the comments would also have needed Washington's approval. "But he was the first ambassador to challenge the Suharto government, and that speech became quite famous."
Others say he helped fight the Suharto regime in subtle ways.
"It seemed like he was hugging a dictator, but he was actually supporting us," said Bambang Harymurti, editor of the hard-hitting magazine, Tempo, noting that "persons non grata with the government" were often invited to embassy receptions.
"Sometimes it would be a small gathering, and Paul would have someone like me sitting next to a military general," Harymurti said with a chuckle. "In this way he sort of empowered the pro-democracy activists."
But critics said Wolfowitz's actions were too little, too late.
"Wolfowitz never criticized human rights issues, let along corruption," said Asmara Nababan, executive director of the pro-democracy research institute, Demos. By staying silent, he "was saying 'don't worry about your domestic problems, America is here to back you.'"
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Associated Press reporters Zakki Hakim and Irwan Firdaus contributed to this report from Jakarta.