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The Indonesian Conundrum: Entrenched Corruption and Failing Reform

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The Indonesian Conundrum: Entrenched Corruption and Failing Reform > Research The Indonesian conundrum: entrenched corruption and failing reform Experts and most Indonesians agree that since the fall of Suharto in 1998, Reformasi and Demokratisasi have failed to check corruption, commonly referred to as KKN: Korupsi, Kolusi dan Nepotisme. The new government of President Susilo Bambang Yudhoyono has made the fight against KKN its chief priority, but the results so far have been disappointing. Peter King A principal reason for this is the impunity of the military and military- hy is the struggle against corrup- dominated sectors of the government in Wtion in Indonesia so difficult? their violent dealing with civil society What are the main mechanisms for its opponents who seek to expose and intensifying proliferation? Who are the undermine the military business principal beneficiaries and cost bearers? empire, which includes illegal logging What role can Indonesian civil society and log export,6 and fuel smuggling and play in overcoming the growing threat theft on a vast scale in collusion with cor- of KKN? Can Indonesia escape the KKN rupt officials at the state oil and gas com- trap, which threatens to create a future pany, Pertamina (Pertambangan Minjak of poverty and turmoil? dan Gas Bumi Nasional).7 TNI and the police also routinely extend protection Corruption is central to understanding to big business associates who them- the failure of Indonesia’s new rulers to selves employ violence and intimidation deliver meaningful reform, well-found- in defence of corrupt empires. ed prosperity or a measure of social jus- tice. In the late Suharto period the coun- TNI remains a prime guarantor of try was widely thought of as a Suharto family wealth, which became kleptocracy, with one extended family clear when Tommy Suharto spent a year figuring as kleptocrats-in-chief. Since on the run in Jakarta under military Suharto’s ‘fall’ (which has been much protection after procuring the murder exaggerated) and the advent of a ‘Refor- of the judge who sentenced him to masi’ (which has fully qualified for its promptly embezzled by the corporate co of the IMF rescue package has now utives, judges, prosecutors, court offi- prison on corruption charges in 2001.8 inverted commas), we have a democra- cronies who controlled them.1 The saddled the long-suffering Indonesian cials, police and military generals Meanwhile, retired military generals at tised – or at least oligopolised – and banks lent the money ‘in-house’ public with an additional debt of sever- (many retired) and politicians and party BIN (Badan Intelijen Negara, the State decentralized version of Suharto-era whence it disappeared, mainly into off- al billion dollars. officials. Then, as decentralisation Intelligence Agency) were plainly KKN. shore investments and debt repay- reforms took hold from 2001, officials involved in the poisoning-murder of the ment. Jeffrey Winters has suggested that there in the provinces and regencies, both founder of Kontras (Komisi Untuk The crony conglomerates, both Chinese should be international criminal bureaucratic and elected, joined the Orang Hilang dan Korban Tindak Kek- and pribumi (indigenous Indonesian), The court actions intended to recover this accountability for the former debt KKN club, colluding with local busi- erasan, Commission for Disappear- and their ‘in-house’ banks have survived money were another sorry illustration of mountain; it seems there should be nessmen and operating even without ances and Victims of Violence) and the crash of the currency, the crash of the failings of the Indonesian legal sys- moral-political accountability at least for the centralised restraints of Suharto’s leading the scourge of the TNI, Munir, the banks, the crash of export-led growth tem in the reform process. Case after the latter one, since the IMF saw fit to dictatorship. This has gravely sabotaged in 2004. Only the BIN field operative and the rise of poverty. Persisting, per- case collapsed under the influence of lend once again into a rotten structure. the potential of special and regional Garuda pilot, Pollycarpus, has been vasive corruption has permitted most of flawed judicial reasoning and action. The There is also the issue of domestic (ordinary) autonomy to deliver long- brought to trial for the killing.9 them to weather default, bankruptcy, IMF, the bountiful source of this new Indonesian accountability, which was delayed economic justice or a sense of bank restructuring and asset sell-offs. effective local participation in the In Indonesia corruption thrives under They have preserved their business aggrieved provinces of Aceh and Papua the influence of a large and still growing empires in the face of complete finan- there should be international criminal and elsewhere.5 business, political, administrative and cial and economic disaster for the state military elite who are prepared to and the people. And they have resorted accountability for the former debt mountain To protect and swindle unscrupulously wield state authority once again to the tried and trusted Thus money politics in parliaments was and state violence – as well as private mechanisms and networks of KKN to complemented by money justice, klep- violence under state or military protec- spectacular effect. instant debt mountain that was supposed submerged in the rush to money poli- tocratic state administration and TNI tion – to defend their interests. Tackling to rescue the economy, watched aston- tics under Suharto’s successor and polit- (Tentara Nasional Indonesia, or armed KKN effectively depends on far-ranging How did things go so ished (though why should it have been?) ical crony, President Jusuf Habibie. forces) capitalism, corruption and extor- reforms that must go well beyond the wrong so quickly? and censorious – but ultimately power- Habibie pioneered his way on the back tion. New government-established insti- window-dressing of Reformasi. Bitter Or we might ask: How did it all go so less – from the sidelines. of the Golkar Party’s attempted looting tutions to combat corruption have pro- political struggles over corruption right for the cronies and their threat- of Bank Bali3 and by bilking the poverty liferated since 1998 – most notably an undoubtedly lie ahead. < ened business empires? As Robison Seven years on from the IMF ‘rescue’ alleviation fund of Bulog (Badan Uru- Anti-Corruption Commission (KPK, and Hadiz have shown, the refinancing Indonesia is essentially still prostrate san Logistik, the national logistics Komisi Pemberantasan Korupsi) and Peter King is a research associate in Gov- of the bankrupt banks following the and now doubly crucified by the gnomes agency)4 to assure funding for the 1999 Court – while anti-corruption NGOs ernment and International Relations at Syd- Asian financial crisis of 1997-98 was of Washington and Wall Street. In the election. from Transparency International to TNI ney University, where he was founding pres- long on carrot but short on stick. Suharto years the World Bank’s tolera- Watch are active and articulate. But ident and later director of the Centre for Almost all of the International Mone- tion of a steady haemorrhage of 30% or The Suharto-era cronies were joined in despite backing from mass print media, Peace and Conflict Studies. His most recent tary Fund’s $14 billion, distributed so of its own development loan funding resuming the plunder of the Indone- notably the Tempo group, Indonesian book is 2004’s West Papua and Indonesia through the Bank Indonesia liquidity to KKN2 left a $10 billion public debt sian interior (to borrow a phrase from civil society remains embattled, strug- Since Suharto: Independence, Autonomy or support fund (BLBI) to rescue and overhang at the moment of crash in Marx) by a widening circle of senior gling for real empowerment in the anti- Chaos? UNSW Press, Sydney. He was an IIAS reflate Indonesia’s private banks, was 1997. The fresh multibillion dollar fias- bureaucrats, state industry sector exec- corruption campaign. fellow in 2005. Genocide . Paras Indone- . ; LaMoshi, Gary. West Papua and West (Chapter 5, ‘The TNI Jakarta Post (Chapter 1). West Papua Pro- (Chapter 1). West Asia Times Online . Blamed for Unfinished Probe into Munir Assassination’, sia RoutledgeCurzon, New York. Paper Debt in the Indonesian Context’. updated for the INFID Seminar on Indone- Debt, Jakarta. sian Foreign Bank ‘Indonesian Group Slams IMF, World over Bank Bali Scam’. Speaker of the DPR (Dewan Perwakilan Rakyat, House of Representatives), was con- victed in 2002 of embezzling Rp40 billion ($4.8 million) of Bulog funding for a food- He was distribution program for the poor. sentenced to three years in jail but did not resign his posts, and the Supreme Court overturned his conviction in 2004 on the grounds that he had acted on then-Presi- dent Habibie’s orders while he was in charge of the State Secretariat and that money had been returned. See Guerin, Bill. 3 August 2002. ‘Robbing the Poor to Help the Rich’. in West Papua? in West 14 February 2004. ‘Tanjung Acquittal: Ver- 2004. ‘Tanjung 14 February dict Against Reform’. Asia Times Online. Indonesia since Suharto: Independence, Autonomy or Chaos? and Papua’). UNSW Press, Sydney. Reorganising Power in Indonesia: The Politics of Oligarchy in an Age Markets ject, University of Sydney. 2005. ‘Indonesia’s President Summons Per- Smuggling’. tamina Officials over Fuel Suharto’s Legal Saga’. Tommy 9. Siboro, Tiarma. 15 December 2005. ‘Govt 1. 2004. Robison, Richard and Hadiz, Vedi. 2. 3-5 July 2000. ‘Criminal Winters, Jeffrey. 3. Press. 31 August 1999. Agence France 4. chair of the Golkar party and Akbar Tanjung, 5. 2004. See King, Peter. 6. 2005. Wing, John and King, Peter. 7. Press. 9 September See Agence France 8. 19 August 2005. ‘Chronology of Roy. Tupai, Notes 12 IIAS Newsletter | #40 | Spring 2006.
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