By Adil W. Surowidjojo

 

As 2004 came to a close, we take a look back at what has been a very interesting year, both nationally and globally. Indonesians carried out their first successful experiment in democracy, with the direct election of members of the House of Representatives, but more strikingly, the President and Vice President.

 

Mixed Feelings: Corruption and the Future of Civil Society

 

As has been discussed by many Indonesians recently, Indonesia’s political climate is still in the process of groping towards good governance and meaningful civil society involvement. Indonesia’s recent parliamentary and presidential elections were deemed successes, both by domestic and international observers. The resulting government, Susilo Bambang Yudhoyono’s United Indonesia cabinet, invites mixed feelings from observers, because the cabinet he has picked does not reflect a prominent spirit of supporting an Indonesian civil society; specifically, his cabinet does not seem to include people who will be strident proponents of eradicating corruption in Indonesia.

           

The most notorious manifestation of bad business in the country is perhaps our culture of corruption, where the line between government and the private sector is blurred in a marriage of diverse interests for personal gain. The Indonesian Corruption Eradication Commission, although it has made notable progress in asserting its strength (most recently by: throwing Abdullah Puteh in prison and receiving a verdict from the Supreme Court that it does not need permission from BI to countermand bank secrecy regulations), struggles against conflicting laws thrown at it by corruptors and bureaucrats alike. Surely such a process is necessary to ensure that the CEC does not scare off business with heavy-handed policies (as financiers fear), but it is too early yet to judge that the CEC’s anti-corruption efforts run counter to Indonesia’s policies of wooing investors. It is, however, not too early to observe that the CEC’s actions are currently hampered at various levels: the aforementioned bank secrecy problem spotlights issues of the CEC’s authority and its compatibility with other prevailing laws; pre-trial arguments forwarded by Abdullah Puteh’s legal defense revealed possible loopholes with regards to whether the CEC’s powers apply retroactively (back to when the Aceh local government’s contract with Rostov was made); and, perhaps most interestingly, the media making a political mountain out of the molehill that is the CEC Idul Fitri ban of government officials from accepting parcels, which showcases a gap of understanding between the public’s anti-corruption aspirations and its free market ambitions. There is a significant concern that these relatively small tests against the CEC’s considerable abilities, especially if they add up, may hamstring the Commission’s effectiveness – just the result potential targets of the CEC desire.

           

In this situation, we can plainly see the need for a strong hand in leading the country to combat corruption. SBY has done some laudable steps in this regard, such as: by turning the presidential and cabinet appointment ceremony into a visual-media recorded contract that binds officials from engaging in corrupt activities, and by writing a Presidential Instruction (Inpres) to guide relevant authorities in the fight against corruption; both of which being parts of the 9^th of December anti-corruption day campaign, which is planned to continue in 2005 as the anti-corruption year. These are obviously the least SBY can do in the fight against corruption. Indeed, critics of his anti-corruption Inpres complain that the document only lists activities that relevant authorities should already be doing, such as the design and implementation of good governance policies, and adds nothing new or decisive in eradicating corruption in the government. Optimists will say that there is only room for improvement, but the world was not built by virtue of blind optimism, but through the machinations and critical thinking processes of dour yet insightful men such as Isaac Newton, Robert Hooke, or John Maynard Keynes, who saw a lot of ugliness in the physical world but were not afraid to encapsulate them in their respective systems: Newton and Hooke who banished superstition in the field of Science, Newton’s role in British national finance during his stint as the Master of the Mint, and Keynes in advocating demand-side government interventions that emphasize the best of the free market while downplaying the worst. The sanctity and effectiveness of the Indonesian economy (with regards to public welfare) will only be preserved (some may say salvaged) by the efforts of men who call into question anti-corruption policies that seem to be wanting. And so we the people of the Republic of Indonesia would like to call on such men to make as much noise as possible and help our President perform the most important task in his political career.

           

Presently we are seeing news that a certain class of Indonesians are growing wary of the current regime, especially since Jusuf Kalla has maneuvered himself into the top spot at Golkar. On the one hand, this arrangement cements the power of the President and Vice-president team over a significant portion of the legislature, and that much talked about man, Akbar Tandjung, appears to have been ejected from the gaming-board. On the other hand, are we absolutely sure that such an arrangement is what the development of civil society in Indonesia needs? Will dissident voices in the House of Representatives and the People’s Consultative Assembly be silenced by a nod and a look from SBY or Mr. Kalla? Will Mr. Kalla simply be the next Akbar Tandjung? In hindsight, it is arguable that previous reform era governments were not able to perform any decisive actions (w.r.t. corruption eradication, for example) because of resistance from the aforementioned institutions, perhaps to the detriment of Indonesia, so perhaps recent developments will work to change this at least; but at the same time these same developments put into highlight, again, SBY’s choice of cabinet members in the first place.

Unsupported by material evidence, these violations to the sensibilities of: proponents of civil society, reform activists, politically active professionals, and the rare Newton-Keynes types (for these belong to a certain class of Indonesians– people who believe that unmitigated power can never bring happiness to society), can easily be argued away as necessary tactics to include all eminent parts of the Indonesian society; calling the current cabinet ‘United Indonesia’ makes sense on this level. At this point in time, public scrutiny on the government must not falter, although the public is humbly advised to respect private boundaries and also not compromise national security (Dr. Azahari is still on the loose, after all); but it should be obvious that a balance of power between all parties (government, civil rights groups, the business community, religious groups, etc.) must be established immediately to ensure that Indonesia does not lose momentum in groping towards a working civil society.

 

Internationally Relevant   

 

Recently Indonesia is mentioned more and more frequently in global news, though unfortunately not always in glowing terms. A big story on the armed vehicle procurement scandal involving ex-presidential daughter Mrs. Tutut, by the UK newspaper Guardian serve to remind us of Indonesia’s importance in the international scheme of things, and also of how misrule by unelected elites can take away that importance.

           

The Scorpion tanks issue uncovered by the Guardian serves to remind us again how important it is to address Indonesia’s corruption problem, and more importantly, to address it retroactively as well; although institutions such as Transparency International argue that dealing with the past may hinder corruption eradication (legal obstacles, taking away attention from current problems, etc.), this case makes it clear that the problems caused by corruption continue to surface time and time again in the future, and at the very least we must pursue the perpetrators if only to save face.

           

Saving face is actually quite important for the new Indonesian regime. For example, the burden of proof is upon us to convince the world that Indonesians are capable of behaving cleanly in all areas of interaction: foreign investors will not have to be afraid of losing tenders because another bidder offered ‘official x’ more money than they did (and this hopefully erases the incentive to offer bribes at all); governments selling arms can be sure that their weapons will not be used by the Indonesian military to oppress a minority group (which may entail losing political clout in their own countries); and so on. This is an ongoing drive that includes a recent seminar/signing of an anti-corruption Memorandum of Understanding, which was held by members of the ASEAN, who invited speakers from member states, the Indonesian Corruption Eradication Commission, and a special guest speaker from the United Nations Office on Drugs and Crime (UNODC). One of the more interesting parts of this seminar was when a speaker from a university in the Philippines reminded the audience of the universality of corruption; it is a problem that exists in all countries, albeit at different levels of severity. The speaker, Prof. Dr. Raul Pangalangan stated to the audience, as well as the UNODC speaker Dr. Dimitri Vlassis, that it is not that Filipinos, or Malays, or Africans are culturally more permissive of corrupt acts, but that groups that are in power in those societies make it very difficult for individuals to thrive without being an active member of that culture of corruption, adding the example of Kofi Annan’s son, Kojo Annan, who is currently embroiled in the massive scandal that is the United Nations Food for Oil program in Saddam’s Iraq, a scandal that if totally uncovered will irrevocably implicate a lot of the world’s heads of state (even in Indonesia!) in corrupt dealings with Saddam in return for cheap oil, for which they allegedly enjoy significant kickbacks. Room temperature in the Hilton’s Golden Ballroom actually decreased by a few degrees after this digression, but this did not avert the audience from absorbing the main point made, which was that corruption can thrive anywhere a society permits it to.

           

Another famous international case that is based on decades of suspicious dealings is also important to mention. The Karaha Bodas Company’s (KBC) case against Pertamina is more or less a flagship case, mostly because it involves: high-drama at the courts of arbitration, US$ 500 million worth of confiscated funds that belong to the Indonesian government. However, Indonesia is currently battling many of these energy sector-based disputes at once, if there is a pattern that is screaming for us to notice is that we sorely need to reform the economic management of our energy industry. One could argue that the whole mess was started precisely when such reforms started, but investigations are turning up convincing evidence that corrupt acts were rife when these projects were started, and so they were not formed in the true spirit of laissez-faire, hence their failure. Resistance to privatization thus far have been mostly due to a general sense of xenophobia that resists control of such important resources to foreign companies; although this is a healthy fear (based on the fact that some of these foreign companies did turn out to be corrupt and inefficient), the blame must be put on the tendering process, and not the involvement of foreign entrepreneurs. The reality that the untapped natural resources of Indonesia can be better accessed and more efficiently produced by private multinational firms, rather than state-owned enterprises, cannot be denied; and so we must return to the premise that Indonesia’s regulations regarding its production of energy must be reformed, taking into account adherence to philosophies of good corporate governance. The goal this time is to weed out the bad multinational firms (who may be interested only in investing in bad projects in anticipation of the returns they can make at arbitration proceedings) in favor of the good ones, with the assumption that good corporate governance and anti-corruption efforts will serve to ensure this goal.

           

The last eight or so years after the fall of Suharto have felt like limbo for a lot of Indonesians, who have had to watch helplessly as Indonesia falls further and further into irrelevance in the global arena. The election of a new government that has a definite potential to bring Indonesia back on track is a spark of flame that needs to be nurtured and watched vigilantly, to prevent even the slightest movement of air from extinguishing it.   

 

Aceh: Devastated

 

The recent undersea earthquake off the coast of Northern Sumatra, and resulting massive tsunamis that has claimed more than 150,000 lives worldwide hit Aceh especially hard: Nanggroe Aceh Daroessalam is home to two-thirds of all deaths caused by the natural catastrophy. Footage of Banda Aceh and Meulaboh tell us at a glance that the region has been set back decades in terms of development. At present, no significant shock has been dealt to the Indonesian economy, though the disaster is certainly no incentive for investors to come to a region already beleaguered by corruption and legal uncertainty. It is still to early to tell if the rebuilding of Aceh will present the Acehnese with more opportunities for employment (even if this is the case, it is cold comfort indeed), but certainly higher level activities such as finances and banking will be close to non-existent (and it was bad enough to begin with – banking experts have revealed that banking activities only constituted 1% of activities in Aceh), and without these sorts of higher functions of society, Aceh’s chances of succeeding as an autonomous local government are severely threatened; it is imperative that local government and commerce be restored and developed as swiftly as possible.

 

Another very pertinent issue is the possibility of aid funds being abused. Certainly the Corruption Eradication Commission, related government agencies, and especially the Indonesian civil society must be vigilant and relentless in detecting any corrupt activities in the handling of aid funds and dealing out correctly severe punishments to deter this sort ghoulish opportunism. The global community has been extremely generous in their outpouring of aid: the US alone has pledged around US$ 700 million – about half from the government and half from the private sector; with the total aid amounting to, at present, around US$ 2 billion. The logistic issues and technical problems with turning this huge amount of funds into effective aid are legion, and so Indonesia must be extremely careful to ensure that the funds do end up benefiting the Acehnese victims, and not slip into the pockets of some domestic or international bureaucrat to pay for their stay at some five star hotel, or worse. Right now aid is clearly prioritized to searching for survivors and to ensure that these survivors do not die of disease or exposure to the elements; this is a dynamic and amorphous process, and we will benefit from trusting agencies such as Palang Merah Indonesia, The Red Cross, and other aid institutions of good repute to optimize the amount of aid they receive. The next step, the rebuilding of Aceh, will be fraught with opportunities for corruption, so the relevant authorities would do well to ensure these processes remain clean and efficient. We do this for two reasons, the first is obviously so that the Acehnese can begin to rebuild their lives and regain a chance to prosper; the second is that if we allow corruptors to abuse the aid funds freely given from the international community for their personal gain, we will lose the trust and the respect of the global community, commodities we as a nation are sadly running low on of late.