Indonesia Expat
Featured News Observations

The Curse of Corruption

Corruption Indonesia
The Curse of Corruption

“From education and business to sport, the government and the judiciary, corruption remains a curse in Indonesia, as indicated by a string of recent cases.

For a long time, especially during the Suharto regime (1966-98), doing business in Indonesia often meant having to pay bribes. The ease of doing business improved under President Joko “Jokowi” Widodo, but then seemed to stagnate in recent years. At which point, the World Bank cancelled its Ease of Doing Business ranking system last year, following criticism of manipulation of its data and methodology, seen as favouring China and Saudi Arabia.

In 2012, Indonesia was ranked an unflattering 129 out of 183 countries on the Ease of Doing Business index, hampered by a lack of legal certainty, notably in contract enforcement. By 2018, its rank had climbed to 72, then for the next two years, it was stuck firmly at 73.

Experienced businesspersons in Indonesia say it has become easier to start a business, notwithstanding capital requirements, but there is still a need to grease the wheels in some areas by using paid “fixers” to ensure that applications and permits proceed smoothly. There are also complaints from foreign residents that it generally costs too much in legal fees to get a contract enforced in court.

In other words, much has improved but corruption remains a blight. While the Ease of Doing Business index has been axed, we can soon look forward to its replacement index, which the World Bank calls the Business Enabling Environment (BEE).

We can also look at Indonesia’s performance on Transparency International’s annual Corruption Perceptions Index. Last year, Indonesia was ranked 96 out of 180 countries, a slight improvement from its 2020 ranking of 102.

Recent media headlines don’t indicate that things are improving. In September, the Corruption Eradication Commission (KPK) named the Governor of Papua province, Lukas Enembe, a suspect for allegedly receiving bribes. He was later accused of embezzling public funds to pay for his fondness for gambling in foreign casinos. Observers say the case is likely politically motivated, as Enembe has not been a staunch supporter of President Jokowi’s Indonesian Democratic Party of Struggle (PDIP). He has so far avoided questioning on the grounds of poor health.

In another high-profile case, the KPK in September arrested one of the Supreme Court’s 51 judges. Sudrajad Dimyati allegedly received Rp800 million to issue favourable rulings in a bankruptcy case involving a financing cooperative, Intidana, based in Central Java. This led to speculation over the soundness of his other verdicts. The Supreme Court responded by insisting there were no problems with his other rulings.

Indonesia’s culture of corruption can be seen at many levels. In August, the KPK detained the Rector of the University of Lampung (Unila), Karomani, for allegedly receiving bribes for accepting new students for the 2022 academic year. Parents who wanted their children to gain enrollment were reportedly asked to pay between Rp100 million and Rp350 million per applicant, through an independent admission system, on top of the usual enrollment and tuition fees.

In addition to the rector, the KPK also nabbed two other Unila officials and an alleged bribe-payer. The illicit fees allegedly amounted to Rp4.4 billion, held in the form of term deposits, gold bars, and cash. Karomani apologised when questioned in Jakarta. The chairman of mass Muslim organisation Muhammadiyah, Anwar Abbas, lamented that the case had tarnished the image of the nation’s education system. He questioned how graduates could have strong characters if exposed to corruption when commencing their studies.

Complaints have also been made about bribes being requested for entry to the police academy, although police insist the admissions process is clean and transparent. Nevertheless, the Secretary General of the Independent Research Agency for State Administrators and Budget Supervisors of the Republic of Indonesia, Harry Khoerul Anwar, in June alleged there were irregularities in the recruitment of academy members. He claimed that some police act as brokers for facilitating entry for new recruits.

The National Police’s image was tarnished this year after a senior police general was arrested for allegedly masterminding the murder of one of his subordinates – and the ensuing fallout led to allegations of police involvement in illegal gambling, narcotics, and even human trafficking.

Within the government, some civil servants have complained that unofficial payments are necessary to gain jobs and promotions. Anti-corruption activists say such practices can prompt officials to then turn to corruption. Last month, a senior official of the Home Affairs Ministry was sentenced to six years in jail for receiving bribes.

The ministry’s former director general of regional finance, Mochamad Ardian Noervianto, was on 28th September found guilty of accepting part of bribes totalling Rp2.4 billion from Southeast Sulawesi’s East Kolaka Regent, Andi Merya Nur, as kickbacks for releasing loans via a national economic recovery program in 2021.

Sadly, even sport in Indonesia is tainted by corruption. In July, four men received jail sentences ranging from 1.5 to two years after being convicted of paying bribes to fix the outcome of a football match in East Java’s third-division league. Match-fixing aside, there have been numerous cases of embezzlement of funds by administrators across a range of sports – putting a stain on Indonesian sporting prowess.

Indonesia wants to put on a good show when it hosts the G20 Summit in Bali in November. It will also be hosting the 2023 FIFA Under-20 World Cup football championship in at least six stadiums from 20th May to 11th June, with 24 participating countries.

If Indonesia wants to achieve greater success in sport, business, education, and governance, it will have to remain vigilant against the scourge of corruption. Inculcating a zero-tolerance approach to corruption would be a great start. Unfortunately, activists say the KPK has been weakened in recent years as a result of leadership changes, stricter bureaucratic arrangements, and a controversial revision of its governing law.

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