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Corruption, as everybody knows, is a major problem in Indonesia. In 2005, Transparency International ranked Indonesia equal 147th most corrupt out of 159 countries it surveyed for its annual Corruption Perceptions Index.
Fighting corruption arguably has also been the defining political issue of post-Suharto Indonesia. Members of the public might expect and tolerate low-level corruption in their daily lives, yet they are angered and cynical about excessive corruption at high levels. The media and the many new anti-corruption NGOs work assiduously to keep the corruption issue - and corruption scandals - high on the public agenda.
President Susilo Bambang Yudhoyono has made combating corruption a priority. In this first year in office, he approved the investigation and/or detention of 67 senior officials on corruption charges. The heaviest burden in the fight against corruption, however, has fallen on a small number of new specialist agencies, including specialist anti-corruption courts, a Judicial Commission and a Corruption Eradication Commission (KPK).
These bodies have had some notable victories. The KPK has been behind some well-publicized sting operations and prosecutions. Some anecdotal evidence suggests that senior bureaucrats are becoming more fearful of exposure and more careful about covering up the evidence of their misdeeds: for instance, there are regular jokes about how low-paid public servants no longer drive their luxury cars to work.
But the challenge is formidable. In the first place, bodies like the KPK are only a drop in the ocean. The KPK has only about 150 staff. In the long run, law enforcement agencies like the police, prosecutors and courts hold the key to eradicating corruption. Yet these bodies are themselves deeply corrupted. Anti-corruption NGOs have labeled one court, in South Jakarta, a 'graveyard' for anti-corruption because it so frequently acquits in high-profile graft cases. The Judicial Commission has advocated the radical tactic of dismissing every Supreme Court judge and reappointing only those who can pass a 'fit and proper' test.
A second problem is that most of the measures taken against corruption so far focus on investigation and punishment, rather than root causes. Little has been done, for example, to provide a transparent pay structure and adequate funding for the civil service.
Moreover, while it would be unfair to doubt the president's sincerity, it is also worth recalling that most of Indonesia's current governing elite rose to power through Suharto's old patrimonial system. At the highest levels, there are plenty of indications the old culture persists. For example, according to Tempo magazine, the Bakrie Brothers company, part-owned by then Coordinating Minister for Economic Affairs, Aburizal Bakrie, recorded an extraordinary increase in profits during the new government's first year. Fifty-five per cent of the company's income came from the infrastructure sector, which is heavily dependent on government contracts and licenses. The magazine made no specific allegations of corruption against Bakrie, but the case highlights how Indonesia still lacks clear rules governing how officials should regulate or divest their business interests while in office.
A lot is being done to overcome corruption in Indonesia. But corruption remains basic to the way the polity functions.
WATCHPOINT: Corruption will not easily be tamed, let alone eradicated.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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