Has Indonesia Accepted Corruption As Part Of Its Culture - Case Study Example

Has Indonesia accepted corruption as part of its culture? Table of Contents I. 3 II. Introduction 3 III. On Indonesia and Corruption as Partof Its Culture 5 A. The View from Business 5 B. The View from the West- Indonesias Corruption Culture 7 B. The View from the Inside 11 IV. Conclusion 15 References 15 I. Abstract This paper attempts to answer the question Has Indonesia accepted corruption as part of its culture?. To answer the question, the paper first introduces the concept of corruption and situates the level of corruption in Indonesia against corruption in other parts of the world. From there the paper explores various perspectives of corruption in the country, namely perspectives from the business community, views from the west on corruption in Indonesia, and finally insider perspectives, or perspectives of Indonesians, on corruption in the country. The paper gleans insights from those various perspectives to conclude that while corruption is part of the culture indeed, and something that is seemingly accepted, there is a counterculture that rejects corruption and seeks to curb corruption in the country (Parlina 2013; Business Anti-Corruption Portal 2011; Olken 2006, pp. 853-870; Banyan 2011; Transparency International 2012; Sentana 2012; Transparency International Indonesia 2011).. II. Introduction Transparency International defines corruption as “the abuse of entrusted power for private gain”. It is worthwhile to parse this. Entrusted power in the context of government is power that the people has given to government officials and employees to do the work of government, including collecting taxes. Entrusted also means power given by the people and by the law to elected officials, with the elections being the mechanism of the entrusting of power. Private gain here means the use of that power to amass advantages, either in monetary rewards, favorable treatment, and other forms of gain not allowed by law (Transparency International 2012). Corruption damages the efficiency of government, and the costs tied to decreased efficiency are said to be among the greatest damages that accrue to governments that are very corrupt, hurting the public finances in very profound ways, and also the delivery of vital government services. Corruption also acts like a kind of tax that increases the costs of dealing with government (Olken 2007, pp. 200-201). A third and most personal blow is that corruption profoundly affects those who rely on government personnel to be forthright and honest in their dealings with people and groups, Where integrity in government is lacking, those who are totally dependent on that integrity are the most affected (Transparency International 2012). One can argue that given the pervasiveness of corruption worldwide, albeit in varying degrees in different countries, and given the inclination of human nature to look out for itself and to break the rules, fighting corruption is something that requires more than just entrusting people to do what is right, and to resist corruption when there are many opportunities to give in. It is something systemic and complicated, and given its long history and pervasiveness, something that seems intractable, hard to deal with, and for some ineradicable and almost accepted with resignation as a fact of life. On the other hand, too, the fact that politicians in countries Indonesia have been winning elections based on platforms promising to rid the government of bureaucracy seems to imply that ordinary Indonesians still hold out hope that corruption can be tamed if not completely wiped out, and that ordinary people hold corruption as a very important issue affecting the well-being of the whole country (Banyan 2011; Transparency International 2012; Sentana 2012; Transparency International Indonesia 2011). The current state of affairs in Indonesia, according to Transparency International, is like this: it remains corrupt, and the situation remains dire. The implication of the way the situation is described and related implies that Indonesian corruption is rampant, and chronic, meaning that it has been a fixture of the way things are done in the Indonesian government, and in politics. That the current government of Mr. Yudhoyono, the Indonesian president, has successfully amassed power via the popular vote on the back of a promise to be totally intolerant of corruption in government speaks of a history of tolerance of corruption. Moreover, the recent events tell us that while the president seems sincere and have won the trust of the people, through successful re-election, the scandals that have continued to rock the administration owing to allegations of corruption among the presidents men and allies speaks volumes of the immense corruption problem facing the country, and at the same time speaks also of the way society has come to be more in tune with those corruption problems (Banyan 2011; Sentana 2012; Roberts 2013). Meanwhile, from a ratings perspective, the gravity of the problem of chronic corruption in Indonesia is highlighted by its dismal corruption ratings. Transparency International deems corruption in Indonesia to be chronic and entrenched, with a 2012 score of 32, sixth in Southeast Asia and in league with Egypt, Ecuador, the Dominican Republic, and Madagascar (Sentana 2012). III. On Indonesia and Corruption as Part of Its Culture A. The View from Business The view from the business sector is one where Indonesia is in recent years enjoying a new level of prosperity and rising economic growth rates, even as the flip side of that has been the endemic corruption that has been hampering efforts of businesses to advance their interests and to do business in the country. Red tape is rampant, and it is standard practice for insiders in government to ask for bribes and fees to be able to transact with government, whether it is to get licenses, get permits, or to do business with government. The law and legal climate as well is somewhat hazy and difficult to navigate, contributing to a situation of instability and uncertainty with regard to dealings with the law and the interpretation of the law by the courts. On the plus side, the government is seen as somewhat keen on stamping out corruption, through various moves aimed at increasing transparency as well as increasing accountability in government. This keenness to root out corruption is seen too, in the way the government of President Yudhoyono has successfully prosecuted and jailed many government officials in the current administration due to convictions on corruption. Moreover, in terms of reducing corruption in government dealings with business, there is said to have been sincere moves to further open up the economy and to improve the overall climate of doing business, largely also through making government more transparent and less corrupt (Business Anti-Corruption Portal 2011). On the other hand, the problems related to corruption and its sources in Indonesia reveal just how ingrained corruption is from the view of business, in the different dealings and transactions that businesses undertake with various agencies of government. Business licenses procurement entails the collection of bribes, and this is seen as an additional cost of doing business, with amounts proportional to the size of the business and the number of licenses required to operate them. Two, tax authorities are seen as being very corrupt. Three, the legal branch, the judiciary and the legal system, is seen as being very opaque, convoluted, unpredictable and corrupt, leading to advice to businesses both foreign and local to stay away from having to deal with the legal system altogether. The legal system is a barrier and an additional cost to doing business in the country, and this speaks volumes of the culture of corruption spreading deep into the heart of the Indonesian government system. If justice and the law are corruptible, then it makes sense to say that the whole system is indeed corrupt, and this has been the case in Indonesia for many decades (Business Anti-Corruption Portal 2011). Moreover, businesses note that Indonesias corruption laws do not cover bribes made to foreign officials, nor do they cover corruption that exists in private businesses, and deal only with government officials and employees, save when corrupt acts drain state coffers or negatively affect the economy directly. Red tape, as discussed above, translates to high levels of corruption on different levels of government. Taking a step back, that business has routinely tried to avoid the legal system altogether, and that it has tried to live with the corrupt governmental system in general, speaks of the somewhat passive acceptance of corruption in Indonesia as something that is part of the culture, and part of the way things happen in the country (Business Anti-Corruption Portal 2011). B. The View from the West- Indonesias Corruption Culture The view from the West, from countries such as the United States, is that of an Indonesia that is corrupt and has been so as part of the way the countrys governments have done things for as long as one can remember, to the point that it has taken the view of insiders of Indonesias high level of corruption as being a normal way of doing business or part of the way of life there. The informed view from the west takes from what people in Indonesia take to be fact, something that is taken for granted as a reality of doing business in the country (Bonner 2005): That a public official had been bribed by a foreign company surprises few here, if any. It is taken for granted that no one does business in Indonesia without paying bribes, routinely disguised as "consultants fees," to government ministers and heads of agencies, many of whom have retired with hundreds of thousands of dollars stashed in accounts in Singapore and elsewhere (Bonner 2005). The extent of the problem as seen in the West is typified by the very wary stance of the US government towards providing aid to Indonesia in the wake of the tsunami that struck Aceh province. The concern then was that even though the United States had the funds and the capabilities to help the country and the province get back on its feet, the problem was that they had little faith, given the high level of corruption there, that the money that they send to the country will not go to corrupt officials instead of to their intended recipients, or that a large portion of the funds will be funneled to the private pockets of government officials in charge of using the funds and of disbursing the funds for various related projects. It is so dire that the US has asked specifically that an outside auditing firm, Ernst and Young, to conduct audits for all US aid pouring into Indonesia in relation to the tsunami in Aceh (Bonner 2005). The negative view of the West towards corruption in Indonesia is highlighted too, in big and small ways, in its press coverage of events linked to corruption in the country. For instance, the coverage of the conviction and appeals process for the wife of timber tycoon Murdaya Poo, on charges of giving a bribe to a government official in exchange for timber licenses in Sulawesi, highlights just how rampant and profitable corruption is in the country. That report showed how profitable it is for government officials to be corrupt, and how profitable it is too, for private businesses, to pay the right bribes in exchange for lucrative deals, concessions, and contracts. In this case, the bribe amounted to about $310,000, a large amount for public officials, even as it is noted that the profits to be made from the timber concession that was awarded was also large (Montlake 2013). The view from the West with regard to the high level and endemic nature of corruption in Indonesia is reflected too, in the way academic literature from the west with regard to aspects of the Indonesian economy take corruption as a given in all equations that deal with the economic activities in the country, and take for granted too that its roots go very deep into the Indonesian cultural psyche, as well as the way local governments and economic activities such as logging all depend on corruption to a certain extent to keep themselves viable. For instance, the academic literature ties corruption in Indonesia with the proliferation of illegal logging. The academic literature also cites corruption, in the form of bribes, as enabling local governments to employ government workers on the cheap, and to keep themselves afloat with the indirect and illegal fees that arise from imposing all kinds of regulations that require government approval for businesses and individuals transacting with government (Smith et al. 2003; Henderson and Kuncoro 2004). Elsewhere in the literature the focus on corruption and the various effects of corruption on life for Indonesians further reinforce the perception of corruption being part of the way government does things in the country. The perception, for instance, runs deep enough for academic literature to actually look to Indonesia to try out models for measuring the effects of such things as corruption on the efficiency and effectiveness of programs to distribute aid to poor people in the countryside. In this particular instance, the assumption is that Indonesia is corrupt, and the corruption is deeply ingrained in government and accepted in society, even at the outermost fringes of that society, and even in the remotest provinces. The goal here is not to establish that, but just to examine aspects of that corruption, done in terms of measuring the reduction in food getting to the tables of the poor from food aid programs coursed through Indonesian local governments (Olken 2006, pp. 853-870). B. The View from the Inside The view from the inside is the view of Indonesians and people doing business and living in Indonesia relating to the corruption in the country. One view is that of taking corruption as something that is not only part of the culture and something endemic, but something that is part of the future planning and the way of life for many Indonesians. By this is meant that corruption in government is something taken for granted, as something that is not to be avoided but is actually part of the incentives for taking on government work, for instance. This is clear from anecdotes that point to government jobs, even the most menial ones, being the subject of coveting by ordinary Indonesians, who are even willing to pay and to bribe their way into government jobs. This is because of the perception, and the reality, that government jobs are lucrative, not because of the low salaries, but because of the bribes and kickbacks that can be had by sitting on a government desk. In the Indonesian tax offices, for instance, the competition for jobs is so fierce, that the most menial clerk positions can command up to $500 in bribes from potential applicants, owing to the fact that such tax office jobs are very lucrative for employees willing to wait for the bribes and the kickbacks to come in. Other anecdotal pieces of evidence point to the same reality. Bribes of about $20 dollars, for instance, can reduce waiting times for a drivers license from five months to a day, so much so that those who have the money just pay the bribe or transaction fee, rather than go through the hassle of the long and uncertain wait. There are stories of people getting into the police academy only if they offer bribes to the admission offices, and that to promotions through the police ranks are greased by bribes, owing to the large sums that can be had from police work kickbacks and bribes to police officers. Further up the food chain, meanwhile, there are no legal mechanisms in place for validating the claims of government offices with regard to the level of need for financial aid, so that when financial aid comes in, there is no way to validate whether the financial claims are inflated or not, or whether the aid given really goes to the intended recipients rather than to the pockets of government officials. These practices are all part of the way of running government in Indonesia (Bonner 2005) Elsewhere the view from within Indonesian society too is that of the judicial branch of government being corrupt, and this has been reflected in guidance to avoid the courts and to try and settle business disputes outside of the courts, through arbitration in countries outside of Indonesia even. The message here is that it is accepted fact in Indonesian society that the judicial system is something that is difficult to navigate and to get a hold of, difficult to predict and to tame, so much so that it is better to just leave it alone, and to essentially try and get justice elsewhere (Business Anti-Corruption Portal 2011). Even in efforts to curb judicial corruption through increasing the pay of judges and other workers in the Indonesian judiciary, the unsaid assumption is that the judiciary is corrupt, and is prone to further corruption, and that one way to potentially solve this is to increase the pay of the members of the judiciary. It is a tacit admission within Indonesian society that the judiciary in fact has lacked the integrity necessary to effect justice in the country, and that because the judiciary is corrupt, reform is needed by way of improving the financial situation of the judges to make them less prone to corruption. On the other hand, the move to increase salaries in the judiciary seems also to be inadequate, and to be met with some skepticism, owing to the large disparities between the salary increase, on the one hand, and the large bribes that are offered to judges to rule one way or another, be it in business cases, or criminal cases. Add to this the fact that corruption is pervasive in other branches of government, and that the ordinary people themselves view corruption as almost normal and are sometimes also willing participants in the corruption process, all point to the difficulties in reforming what is considered to be a culture of corruption already deeply ingrained in Indonesian society and way of life (Parlina 2013; Business Anti-Corruption Portal 2011). Elsewhere we see too, that Indonesians see the close relationship between corruption in society and in government on the one hand and the politics on the other, with the latter also an arena of rampant corruption, and an arena that perpetuates a vicious cycle of corrupt practices through to the other arenas of Indonesian government and society. For instance, where laws have been observed to have been put in place to check corruption in political campaigns, through caps on political contributions and a greater scrutiny of the sources of funding for political campaigns, the reality on the ground is that those laws and regulations are full of loopholes that can and have been exploited to corrupt the electoral processes. For instance, where laws have been put in place to limit campaign contributions by donor, there are no checks in place to validate that the donors are real and not made up. This leads to corrupt donors making up names in order to spread out large donations over several entities, and thus circumvent the law. Again the observation here is that this state of affairs further reinforce the conclusion that corruption is indeed pervasive in Indonesian culture and almost accepted as something that cannot be done away with, deeply ingrained as it is in the habits and thinking of Indonesians (Setuningsih and Sihaloho 2013). IV. Conclusion This paper looked at various governmental, media, academic, and business perspectives both outside and inside Indonesia to be able to glean insights into corruption in Indonesia,, and to be able to answer the question of whether or not Indonesia has come to accept corruption as part of its culture. These various perspectives and insights seem to point to a somewhat complicated answer. There is no doubt that outsiders, as reflected in media accounts and the academic literature from the west, see corruption being deeply embedded in the way Indonesians do things. Within Indonesia too, the observation is that Indonesians have lived with corruption and have been in some cases parties to corruption as well, seeking out opportunities to participate in and profit from corruption in government. On the other hand, there are also more sincere moves on the part of government and the public to stamp it out. It may be that while it is part of the culture, the attitude to corruption is not the same across all segments of Indonesian society and culture. In other words, though it is part of the way things are done now, nothing precludes Indonesias more earnest anti-corruption forces from making headway to curb corruption and change the corruption culture in the country. This can be done with legislation and continued social reform (Parlina 2013; Business Anti-Corruption Portal 2011; Olken 2006, pp. 853-870; Banyan 2011; Transparency International 2012; Sentana 2012; Transparency International Indonesia 2011). References Banyan, 2011. Indonesian Politics- Corruption Everywhere. The Economist. [Online] Available at: http://www.economist.com/blogs/banyan/2011/09/indonesias-politics [Accessed 24 February 2013] Bonner, Raymond, 2011. Indonesias culture of corruption may hinder aid. The New York Times Asia Pacific. [Online] Available at: http://www.nytimes.com/2005/01/13/world/asia/13iht-graft.html?_r=0 [Accessed 24 February 2013] Business Anti-Corruption Portal, 2011. Indonesia Country Profile. Business Anti-Corruption Profile. [Online] Available at: http://www.business-anti-corruption.com/country-profiles/east-asia-the-pacific/indonesia/?pageid=226 [Accessed 24 February 2013] Henderson, J Vernon and Kuncoro, Ari, 2004. Corruption in Indonesia. National Bureau of Economic Research. [Online] Available at: http://www.my-world-guide.com/upload/File/Reports/i/indonezia/Corruption%20in%20Indonesia.pdf [Accessed 24 February 2013] Montlake, Simon, 2013. Indonesian Billionaires Wife to Appeal Graft Conviction As Public Sours on President. Forbes. [Online] Available at: http://www.forbes.com/sites/simonmontlake/2013/02/08/indonesian-billionaires-wife-to-appeal-graft-conviction-as-public-sours-on-president/ [Accessed 24 February 2013] Olken, Benjamin, 2006. Corruption and the costs of redistribution: Micro evidence from Indonesia. Journal of Public Economics 90. [Online] Available at: http://conferences.wcfia.harvard.edu/sites/projects.iq.harvard.edu/files/gov2126/files/olken_indonesia_0.pdf [Accessed 24 February 2013] Olken, Benjamin, 2007. Monitoring Corruption: Evidence from a Field Experiment in Indonesia. Harvard University and National Bureau of Economic Research/Journal of Political Economy 115 (2). [Online] Available at: http://www.povertyactionlab.org/publication/monitoring-corruption-evidence-field-experiment-indonesia [Accessed 24 February 2013] Parlina, Ina 2013. Judges to get better pay to battle judicial corruption. The Jakarta Post. [Online] Available at: http://www.thejakartapost.com/news/2013/01/18/judges-get-better-pay-battle-judicial-corruption.html [Accessed 24 February 2013] Roberts, George, 2013. Indonesian party chief quits over corruption claims. ABC News. [Online] Available at: http://www.abc.net.au/news/2013-02-23/indonesian-politician-suspected-of-corruption/4535572 [Accessed 24 February 2013] Sentana, I Made, 2012. Indonesias Corruption Rating Remains Bleak. Transparency International. [Online] Available at: http://www.ti.or.id/en/index.php/news/2012/12/07/indonesias-corruption-rating-remains-bleak [Accessed 24 February 2013] Setuningsih, SP and Sihaloho, Markus, 2013. ICW Warns of Increase in Graft Tied to Polls. Jakarta Globe. [Online] Available at: http://www.thejakartaglobe.com/lawandorder/icw-warns-of-increase-in-graft-tied-to-polls/566607 [Accessed 24 February 2013] Smith, J. et al. 2003. Illegal logging, collusive corruption and fragmented governments in Kalimantan, Indonesia. International Forestry Review 5 (3). [Online] Available at: http://forestclimatecenter.org/files/2003%20Illegal%20Logging%20Collusive%20Corruption%20and%20Fragmented%20Governments%20in%20Kalimantan%20Indonesia.pdf [Accessed 24 February 2013] Transparency International, 2012. What We Do- Corruption. Transparency.org. [Online] Available at: http://www.transparency.org/whatwedo?gclid=CI-k8-XC1bUCFW5V4god3BIAkg [Accessed 24 February 2013] Transparency International Indonesia, 2011. Corruption Perception Index 2011- Protests that marked 2011 show anger at corruption in politics and public sector. Transparency International. [Online] Available at: http://www.ti.or.id/en/index.php/publication/2011/12/02/corruption-perception-index-2011 [Accessed 24 February 2013] Read More