“Curbing in , 2004-2006 A Survey of National Policies and Approaches”

An Open Forum With

Dr. Joel Hellman Chief Governance Advisor The World Bank Mission

January 25, 2007 Jakarta, Indonesia

Curbing Corruption in Indonesia, 2004- the administration of President Susilo 2006, co-published by The United States- Bambang Yudhoyono (SBY, as he is Indonesia Society (USINDO) and the Center popularly known). In fact, efforts to for Strategic and International Studies combat corruption began five to seven (CSIS) Jakarta, was commissioned by the ago—before the start of the SBY World Bank mission in Jakarta and is a administration. comprehensive review of efforts to combat corruption in recent years. The study’s While some claim that there has been authors are Soren Davidsen, Vishnu Juwono progress and others deny it, what is clear is and David G. Timberman. Financing for that there is no government-wide anti- this project was provided by the Netherlands corruption campaign, no master plan. Trust Fund for Institutional Development However, as detailed in Curbing and Capacity Building administered by the Corruption , there have been “enormous World Bank. An electronic copy of Curbing changes in governance” in Indonesia, not Corruption can be found on USINDO’s web only in the SBY administration, and there site, www.usindo.org, and a limited number have been important changes in the of copies are available for libraries and institutional framework of combating institutions by contacting corruption. Several new bodies have been [email protected]. Dr. Joel Hellman established and they have become introduced the book at a program sponsored relatively independent and autonomous-- by USINDO in Washington, DC on January before SBY, the governments that 30. A summary of Dr. Hellman’s remarks established these bodies did not want them and the ensuing discussion follows. to be particularly effective.

The fight against corruption, according to The new watchdog bodies, such as the Dr, Hellman, is the most important issue in Anti-Corruption Commission (KPK), act the public debate over the effectiveness of with new power and autonomy. These www.usindo.org - 1 - Curbing Corruption, January 25, 2007

young institutions are recruiting and democratic politics and competition are selecting personnel carefully, even using replacing favoritism. assessment tests to attempt to measure an applicant’s integrity, and they are now There is, as yet, no comprehensive anti- pursuing actions within a strong legal and corruption plan aimed at preventing regulatory framework. Dr. Hellman was corruption. A systematic approach, public emphatic that there is no centrally directed, education, and other measures politically motivated campaign by the SBY recommended in the book are needed. government; for this reason, and because of The controversial Presidential the increasing effectiveness of the anti- Implementation Unit, headed by the well- corruption bodies, these bodies are raising known reformer Marsillam Simanjuntak, the “discomfort level” in business, politics, could bring some coherence and and society. This, he observed, is a “sea coordination to the anti-corruption effort, change” for Indonesia and represents although the unit faces political pressures. important progress in the struggle for good Real reform requires individual ministers government. implementing changes in their own ministries. There are inevitable problems, according to Dr. Hellman: Dr. Hellman enumerated the main results • Overlapping jurisdictions among of the anti-corruption effort thus far: several of the anti-corruption • A “major wave” of prosecutions agencies: for example, between the for illegal activity, especially at the Anti-Corruption Commission and local level, although there is been the Attorney-General’s Office, and little change in corruption the Anti-Corruption Court and the prevention. regular civil court system. • An evident “ripple effect” on the • Laws, some of which date back to behavior of government officials Dutch times, are inadequate. and those doing business with the • Emerging competition among the government, marked by a slow- anti-corruption agencies and other down in government decision- regulatory bodies in conducting making, especially procurement. investigations, leading to multiple • A reluctance of banks, especially investigations of government state banks, to loan money out of organizations, government-owned fear of making bad loans that could banks, and state-owned enterprises result in charges of corruption. by different agencies. • A backlash that is “starting to bite” in terms of challenges to the The lack of political influence in the anti- independence and mandate of the corruption activities also means that anti-corruption bodies, including prominent individuals and government challenges in the Constitutional officials are being targeted. This has Court, investigations against anti- resulted in a decline of associated corruption officials themselves, with the Soeharto government--before SBY, and a campaign against the no prosecutions of high profile individuals institutional framework in which could occur. Today, with direct elections the KPK and other bodies operate. for the top three echelons of government, These challenges have sometimes www.usindo.org - 2 - Curbing Corruption, January 25, 2007

been supported by business interests • The Indonesian public seems and others frustrated by government less concerned about daily agencies’ inability to act. corruption: they expect fees for government services. The Dr. Hellman also observed that too little KPK, however, is starting a attention is being paid to political public campaign to describe corruption, such as political party financing, improper behaviors. abuses involving the parliament (DPR), • The performance of the anti- establishing clearer conflict of interest rules, corruption bodies has varied and vote-buying in election campaigns. and there have been staff SBY could use his “huge” popular mandate members of the KPK to push anti-corruption efforts, but he has prosecuted for ethics not yet capitalized on the opportunities to violations. However, these press for change. bodies place great emphasis on the recruitment, selection, The following points were brought out in the training, and monitoring of question and answer period: their personnel. • Civil service wage levels may • The press has been not necessarily be the main “tremendously active” in driver of corruption; providing daily scrutiny of and abuse in the selection and Indonesia’s anti-corruption advancement of government institutions. officials may be greater problems.

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