Indonesia is one the world’s most corrupt countries, according to studies conducted both by the Berlin-based organisation, Transparency International, and by the Hong Kong-based organisation, Political and Economic Review Risk Consultancy (Katz, 1995; Aji, 1995). Although it is unclear exactly what these organisations mean by ‘corruption’, the studies also suggest that the problem of corruption is not the monopoly of developing countries, but also a problem of western developed countries such as the United States, Britain, Germany and France. Alatas (1990) clearly states that the problem of corruption is tranysmetic, that is, it inheres all political systems.
This article surveys various definitions of corruption and explores why corrupt practices exist in public services. It further analyses which of these definitions and rationales apply in the Indonesian context. By identifying these sources of corruption, this essay will finally propose some suggestions to overcome the problems, and the difficulties which may be faced in implementing the proposed solutions.
The results of the studies mentioned above may have been different if the definition of corruption applied was not a fixed, uniform one, but based on what is believed in each country. Gift-giving practices in many developing countries in Africa and Asia, based on traditional beliefs, honours or social status, may have been categorised as corruption in western developed countries, but not by traditional gift-giving practitioners (Ali, 1985). If the studies had also included the sale of state offices in France and the United States this century in the calculation of the corruption index, the result may again have been different. Likewise, if the studies had been undertaken two hundred years ago, such practices may not have been categorised as corrupt, and the results would be different again.
Gould (1991) and Gardiner (1993) have argued that there is no single definition of corruption which can be accepted by all peoples of different places and times. Corruption may be different from region to region, and from time to time. Some authors such as Johnston (1982) and Heidenheimer et al. (1989) have defined corruption simply as power or public role abuse for private gain, but Nye (1979:417) proposed a more complex and longer definition of corruption, as:
behaviour which deviates from the normal duties of a public role because of private-regarding (family, close private clique) pecuniary or status gain; or violate rules against the exercise of certain types of private-regarding influence. This includes such behaviour as bribery (use of reward to pervert the judgement of a person in a position of trust); nepotism (bestowal of patronage by reason of ascriptive relationship rather than merit); and misappropriation (illegal appropriation of public resources for private-regarding uses).
In order to maximise recognition of corrupt practices among the Indonesian public servants, Nye’s definition is adopted throughout this essay.
Sources and forms of corruption
As with definitions of corruption, theorists disagree as to why public servants behave corruptly. This section part discusses some of these reasons and analyses which forms of corruption are manifest in Indonesia.
Alfiler (1986), Rose-Ackerman (1987), and Mackintosh (1992) point out that since the public sector, with its limited capacity, on the one hand, is the only provider of certain services, while a large number of citizens, on the other hand, need those particular services, corrupt practices easily occur. Public sector products, including, for instance decisions and licences, are valuable because demand for them usually exceeds supply. This is worsened by expanding role of the state and the fact that official procedures are usually time-consuming, uncertain, impersonal and expensive (Johnston, 1993; Hope, 1987).
In Indonesia, bribes are the most common form of corruption in relation to the abuse of the monopoly function of public sector. In economic jargon, Gray (1979) describes bribes as the market price which should be paid by consumers to buy certain goods in the form of licences or permits. For example, to obtain an identification card (which is obligatory for adult in Indonesia), driving licence, marriage, death or birth certificate, or documents from the immigration department quickly, an applicant may have to pay up to twenty times the official cost (Schwarz, 1994:135).
Furthermore, the price will certainly be more expensive if the license or permit applied for is for productive business, whether the permit is required to run a small shop or a big company. It is widely known (Inside Indonesia, March 1995:2-4), for example, that requests for an official licence for a new commercial publication are purpotedly granted only if twenty percent of the company stock is reserved for a senior official in the Department of Information. This excludes an additional, invisible monthly fee of five to ten million rupiah (AUD $3,000-6,000). At present, this senior official or his immediate family owns shares in at least thirty-one Indonesia print publications, in two private television stations, and in two private radio companies (Inside Indonesia, March 1995:4).
(b) Low income and poverty
Poverty, or being paid at a rate inadequate to meet daily basic needs is another factor luring public servants into corruption (Tinbergen, 1993 inter alia). In the case of Indonesia, Schrool (1980), Pauker (1980) and Soedarso (1969) agree that widespread corruption in Indonesia is closely related to, among other factors, a means of supplementing excessively low government salaries and not to amass vast private fortunes. As an illustration, Tansil (1980) compared the salary of newly recruited Indonesia police with their counterparts in Greece, (a relatively less rich country in the European context), and also compared the prices of certain goods and services in both countries. Tansil concluded that although the prices of basic goods and services in Indonesia and Greece are similar, the salaries of the Greek police are four times higher than those of Indonesians.
It is not uncommon, then, if the ‘motorists in any of Indonesia cities view the police as collectors of an unofficial road tax, rather than as upholders of the law’ (Schwarz, 1994:135). Not only on the road, but also on many occasions off the road, the police will try to ‘tax’ the ones needing their services. Schwarz mentioned his own experience. When his car was stolen in 1991, Schwarz needed a verification letter from the police in order to collect on his car insurance. A police captain would only ‘help’ prepare the letter if he was given US$ 300 (Schwarz, 1994:135).
However, it may be argued that low income as a justification for corruption may only hold true for the ‘street-level bureaucrats – although there are many Indonesian public servants at this level who perform their duties honestly. The need to supplement a low income can not remain a justifiable excuse for the senior official in the Department of Information, for example, whose salary, together with other incentives and privileges, must be more than adequate.
(c) Traditional value
While traditional gift-giving practices may resemble corruption in the form of bribery, other traditional values may have resulted in more nepotistic forms (Olowu, 1993 inter alia). The most obvious Indonesian example is in the recruitment and promotion of public servants, including military personnel, but also occurs in selection for entry to schools and universities. The criteria for public service recruitment and promotion in many cases no longer follow Weber’s model; that is, the bureaucrats be selected on the basis of merit. Rather, it is based on patronage and how big a bribe or so-called ‘thanks-giving’ a candidate can offer to the recruitment and promotion committee. Recruitment is therefore not merely an administrative procedures, but provides income for relatives, supporters, clients or other patrons (Palmier, 1985; Hague, et al., 1993). Besides a political purpose to absorb unemployment into the public sector, the patronage system has also caused internal pressure to increase the size of Indonesia administration from approximately 420,000 public servants in 1950 (Feith, 1962:83) to 4,030,220 in 1994 (Halligan and Turner, 1995:31). This large number of public servants may also be a factor preventing the payment of adequate salaries mentioned earlier (Palmier, 1985).
Furthermore, nepotism is also clearly at work among major actors in Indonesia’s economy. Almost all Chinese conglomerates receive facilities from the government such that, according to Bratanata, a leading critic in Indonesia, ‘to most Indonesians, the word ‘Chinese’ is synonymous with corruption’ (as cited by Schwarz, 1994:98). The most popular facility awarded is a monopoly to provide certain goods and services, or a contract to be the sole supplier to the government of particular goods and services at ridiculously inflated prices – up to 200 percent more than market prices (Aji, 1995:86).
(d) Public ignorance
Public perception is another crucial factor determining a nation’s level of corruption. The more apathetic the society is toward the corrupt practices, (as is the case in many developing countries), the more widespread the government graft and bribery will be (ICAC, 1994; Ali, 1985). Although a poll by Tempo in 1980 showed that 43.8 percent of respondents named corruption and abuse of power by public servants as the most dangerous element in the country (Hamzah, 1991:4), the Indonesian public seems to tolerate corruption. Two factors may explain this phenomenon. Firstly, the people are apathetic because they have lived with corruption for such a long time that it has become a habit. The history of corruption in Indonesia, according to Anderson (1972), began in the time of World War II, when the arbitrary reduction of salaries through inflation meant that in less than four years the Indonesian rupiah sank to one sixtieth of its previous value. Since then, corruption has remain a stubborn feature of the republic.
Secondly, public ignorance toward corruption may sometimes be related to cultural practices or traditions. Since forty percent of the Indonesian population is Javanese, and in many cases dominate the key positions in public sector, Javanese culture is often blamed for the practices of corruption, collusion, and nepotism in the public service (Magnis-Suseno, 1995). It is a Javanese cultural imperative, for instance, to avoid conflict. Javanese people may tend to tolerate corrupt practices rather initiate conflicts with the culprits by taking action or reporting the problem. In addition, as a colonised people, the master-servant relationship of colonialism linger on. Public servants are seen as the masters who are always right, who never make mistakes and therefore can be blamed for anything they do (Magnis-Suseno, 1984). Indeed, according to Schwarz (1994:135), the very term ‘public servant’ is something of a misnomer in Indonesia because in this ‘quasi-feudal’ culture, it would be more accurate to say that government employees are the ‘owners’ of the nation and the general public their servants.
(e) Forms of government
It is widely believed that democracy delegates certain powers to society which may function as a check on the abuse of power by the state. The presence of strong political parties and pressure groups, and freedom of press may offer safeguards against arbitrary or corrupt decision-making (Ali, 1985). Unfortunately, although Indonesia has had democratic institutions such as parliament, political parties and regular elections since independence, in effect the government is still far from democratic (Budiman, 1990; Crouch, 1990).
The elections, for example, which have been conducted five times during Soeharto’s presidency have been neither free nor fair because it is evident that bribes and cheating are at work in various forms (Liddle, 1992 inter alia). The candidacy for members of parliament (MPs) must be approved by the government, and MPs from the opposition parties who might enjoy popularity among voters are, then, denied candidature (Liddle, 1992; Stanley, 1992). In fact, of the 1000 members of People’s Consultative Assembly (MPR), which decides who should govern the country, only 400, being also members of House of Representative (DPR), are elected. The other 600 are appointed by the government (YLBHI, 1990:68). As a result, elections which give the people a ‘vote’ not a ‘say’ (Stanley, 1992:2), hardly effect any real change in the way Indonesia is governed (Frederick and Worden, 1992), and do nothing to change the socio-political status quo.
The press, which has been a very effective means in preventing the government from abusing its power in many countries (Corbett, 1992) is also suffering in Indonesia. Although there are more than 200 press publications, nearly 700 private radio stations and five television companies operating in the country, Indonesian journalists are not able to report freely because although the Indonesian Pancasila press is ‘free’, it must also be ‘responsible’ (Indonesia Department for Information, 1994:221-2). No-one knows exactly what is meant by a ‘free and responsible press’, but twelve newspapers and magazines were banned in 1974, fourteen others were closed four years later, as was one in 1990 – all for being ‘irresponsible’. The latest media closure occurred in June 1994, when two leading Indonesia news magazines, Tempo and Editor, along with the tabloid Detik, were banned. Although the government gave the official cause for their shut-down as ‘administrative failure’, it is widely believed that these three weeklies were banned because they openly criticised some Ministers’ policies (Utami et al., 1994; Inside Indonesia, September 1994; Frederick and Worden, 1992; Orentlicher, 1989).
Combating corruption: implementation problems
From the evidence offered in the previous section, it could be argued that serious and comprehensive anti-corruption campaigns are necessary – and must be sustained – if corruption is to be rooted out in Indonesia. Of course, after several decades of entrenched corruption, it would be very difficult to totally eradicate (Hope, 1987). However, in the Indonesian context, the following strategies may minimise corrupt practices in the public sector.
(a) Administrative reform
Comprehensive administrative reform in the form of privatisation, deregulation, decentralisation, professionalisation and commercialisation of public services is the first thing which should be done. Privatisation may take various forms from contracting-out public services or functions or selling off state’s assets (Samson, 1994; Lane, 1993). The underlying idea is not to pit the private sector against the public sector, but rather to establish competition in order to minimise the monopoly provision of public goods and services, and to ensure the public accountability of all providers. The normative perspective of Vining and Weimer (1990) argues that goods and services should only be produced by the government where the supply is not contestable (or competitive), and should be contracted with public financing when supply is contestable. The ‘exit and voice’ theory of Hirschman (1970) also supports the privatisation strategies for minimising corruption. Public consumers will readily exit from goods and services offered by the public sector where a cheaper, better and incorrupt alternative is available.
Indonesia is probably the most regulatory country in the world with respect to permits and licences. To get married, to enrol in a school and university, and even to have a discussion among more than five people, one needs a permit from the authorities (Gaffar, 1995). Since this licencing activity is a critical arena of corruption, deregulation in this area may minimise corruption. ‘Deregulation’, here, refers to reducing or abolishing unnecessary rules and regulations (Caiden, 1993). As a reform strategy, deregulation is based on the fact that there is a positive correlation between corruption and the scope of government activities: the more interventionist the government, the greater the risk of corruption. If some government activities were restricted or abolished by deregulation policy, there would be fewer vehicles for corruption. This may, however, have political implications, and these will be discussed later.
Decentralisation, according to Charlick (1993), Olowu (1992) and Hope (1987), is an appropriate strategy with which to minimise corruption especially in very centralised countries such as Indonesia. However, decentralisation must not be merely administrative, but must involve the delegation of real authority – including the authority to generate and reserve a portion of local revenues. Local authorities must also be accountable both to local and higher groups. Abuse of authority and public corruption is less likely to occur if the rules which govern local officials are at least in part defined by local norms, evincing local support and legitimacy. However, although the government has publicly advocated a decentralisation program, it is one limited to administrative functions, not fiscal functions.
Bahl and Linn (1994) offer a number of factors to explain why central governments, especially those in developing countries, tend to keep centralising their fiscal functions centralised. Three of those factors seem consistent with Indonesian conditions. Firstly, fiscal centralisation allows the central government to distribute funds proportionately among differently wealthy regions. This is justified by the fact that in some Indonesian provinces (such as those in the Nusa Tenggara islands), the land is very dry without natural resources, while in others (such as Sumatra and Kalimantan) the land is very fertile and rich in mineral resources. By retaining central authority, the government is able to shift the wealth and revenues from the richer to the poorer provinces.
Secondly, local governments in almost every country have very weak administrative practices and service delivery capabilities, such that taxes and other revenues may not be optimally collected if financial functions are decentralised to local government. If this is the case, however, the scarcity of human resources in local governments may be overcome by relocating public servant from the headquarters to the field, and by using special incentives to keep senior officers in the field. Finally, central governments may be afraid of social upheaval and state disintegration if local governments are given fiscal autonomy. The Indonesian central government may fear that the trauma of a number of regional movements for independence in the 1950s and 1960s, such as the Aceh Independence Movement and Papua Independence Organisation, may reoccur (Schwarz, 1994).
Professionalisation and commercialisation of the Indonesian public servants, as has occurred in some state enterprises, may also be helpful in minimising corruption. Training is an important method because ‘no matter how well qualified a person may be at the time of recruitment, becoming an effective and efficient public servant must be taught and inculcated rather than assumed’ (Hope, 1987:137). Administrative training, however, should not be viewed merely as a technocratic exercise, but its objective must include the creation of commitment in public servants to national goals and values, including ethical personal behaviour and a strong work ethic (Paul, 1983).
Because the number of Indonesian public servants is so large that it may be a crucial factor in the government’s inability to increase the salaries, redundant personnel should be retrenched through programs of phased deployment and early retirement. The government’s ‘zero growth public service’ program should be seriously implemented, and where recruitment must occur, merit-based and performance-oriented should be applied. The practice of recruiting the unemployed into the public sector simply to improve the unemployment statistics should be stopped, and programs which improve employment opportunities outside the public sector should be introduced. In addition, to minimise the temptation for public servants to act corruptly in order to bolster their low incomes, public sector salary levels should be reviewed to ensure that wages correspond to the cost of living. Similarly, senior public servants’ salaries should be competitive with their private sector counterparts’, and non-monetary allowances should also be introduced as part of the total salary package.
(b) Public mobilisation
Perhaps the most important factor in controlling corruption, according to Gardiner and Malec (1989), is public commitment: insistence on the part of the community that corruption is intolerable. Therefore, public mobilisation programs should be introduced in Indonesia. There are at least four factors contributing to the public ignorance and apathy surrounding corruption in Indonesia. Firstly, there is a lack of information: citizens may not know that public servants are corrupt, that corruption is costly to society, and that corruption affects them. Secondly, improper and traditional values as described earlier may hinder public commitment: citizens, for example, may believe that personal gain is the only thing that counts and that public servants are supposed to look out for themselves alone. Thirdly, the public may lack opportunities to express its intolerance of corruption: citizens may not be able to report corruption without retaliation. Lastly, there may be no incentive for a public commitment to anti-corruption reforms: comparing the costs and benefits of the present situation with those of a public sector, citizens may feel that they gain more from corrupt government than they would from an honest system, and may lose more from taking action than they would gain (Gardiner and Malec, 1989:108-9).
To succeed, therefore, a public mobilisation program must address these four concerns. Both the Hong Kong and the New South Wales Independent Commission Against Corruption, for example, campaign against corruption through various publications, brochures, film and video competitions, seminars, discussions, and advertisements. This is expensive, of course, but one must be considered against the larger sums of public money which will be saved if the programs are successful (Clark, 1989; ICAC, 1994). Education in proper values and ethical behaviour – beginning in schools – could also be introduced. This might include, for example, correcting the misconception that an advantage is corrupt only when large sums of money or when highly-placed public servants are involved, or could involve generating a sense of public pride in belonging to an honest society. In short, a successful program a successful program will encourage citizens in four areas; not to participate in corruption, to ‘blow the whistle’ when they become aware of specific instances of corrupt behaviour, to support honest candidates for public office, and to work for public integrity.
(c) Political reform
The last, but probably the most important factor determining the success of anti-corruption reforms in Indonesia, is political reform towards a democratic system of government. A number of writers point out that democratisation has positive effects in reducing corruption, both in the public and private sectors. The more democratic a country, the more likely mechanisms will be put in place to monitor the performance of administrators and bureaucrats, as well as the incentives created to promote incorruptness and punishments mandated to discourage corrupt practices (Noonan, 1984 inter alia).
Free press, that is, a press not subject to being banned or censored by the authorities, can become an effective and efficient monitoring and controlling mechanism in a democratic environment because it is easier, then, for the media to investigate allegations of corruption and expose them. In Japan, for example, the mass media exercise strong influence on the public, and have an important role in revealing unfair administrative actions and corruptions. It was the media revelation of an aircraft scandal which finally forced the ‘popular but high-handed’ Prime Minister Kakuei Tanaka to resign from office (Tashiro, 1988:219).
Political reform in Indonesia toward democracy may see competitive elections, independent political parties and vocal parliamentarians controlling the executive and reining in corrupt practices. In India, according to Jain (1988), parliamentary control over the executive has been effective not only in general political control, but also in detailed examination of government and public servants’ activities. In contrast, there is abundant evidence showing that the level of corruption found in such quasi-totalitarian state with very weak, ‘rubber stamp’ parliamentarians such as the former Soviet Union, Eastern Europe, and People’s Republic of China, is enormous (Simis, 1982).
Political reform towards democracy is not only the most important anti-corruption strategy, but is also likely to be the most difficult to achieve. The first difficulty arises because the so-called middle class – educated people of a certain level of wealth (who, in many cases, such as in the South Korea and Thailand, have become effective fighters for democracy) – is not a true middle-class. Unlike their counterparts in other countries who are successful because of their entrepreneurial skill, Indonesia’s businesspeople, mostly ethnic Chinese, are very dependant on government patronage various kinds of protection and monopolies. Although economically powerful, but politically very weak (and well aware of the streak of anti-Chinese sentiment which runs through Indonesian society), these people have an interest in maintaining the current political system in which they can buy protection via personal alliances with government officials or through financial contributions to the institutions charged with maintaining the status quo (Schwarz, 1994).
Secondly, as some analysts argue, the political reform toward democracy in Indonesia will only be realised if the initiative comes from the old but powerful and influential president, Soeharto (Crouch, 1994; Tornquist, 1990). However, it remains doubtful as to whether the president would give up after more than thirty years in power.
Corruption is a problem for both developed and developing countries. In Indonesia, corrupt practices are triggered by; the monopoly functions of the public sector in delivering certain services; poverty and low public sector incomes; traditional values; ignorance; and the form of government. Although some strategies to combat corruption have been identified, these are unlikely to succeed in Indonesia so long as the government remains undemocratic.
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